Marc Lee: Progressive carbon tax reform is a win-win opportunity for B.C.

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      By Marc Lee

      Climate change forced its way onto the political agenda in 2012, as Hurricane Sandy ripped through the northeast United Stages just days before the election. And while action remains frustratingly slow, extreme weather disasters in the billions of dollars are making a statement that politicians can no longer ignore. The costs of our addiction to fossil fuels are starting to pile up, and we cannot afford to keep dithering.

      Recent surveys show that the public is ahead of the politicians in wanting climate action. Resistance to change, however, comes from greed and fear: vested interests from fossil fuel industries have disproportionate influence in the corridors of power, and politicians and citizens alike are concerned that action will hurt the economy.

      Saying no to new fossil fuel infrastructure like the Enbridge pipeline is an essential first step towards a shift to a clean energy economy. But to pass the political test, climate action must also speak to a positive vision of a zero carbon B.C. It must be fair, build alternatives like public transit and district energy, and create good jobs in areas that lower our greenhouse gas emissions.

      Decarbonizing our economy will take time, and let’s face it, money. B.C. has an advantage here from its large base of clean electric power, its early actions on climate, and, in particular, the carbon tax. While it is hard to differentiate between the impact of climate actions and the recession, the carbon tax deserves some of the credit for B.C.’s drop in GHG emissions, down 4.5 percent as of 2010 relative to 2007 levels.

      A revamped and reformed carbon tax regime should be the engine for the “green industrial revolution” the province needs. Making the combustion of fossil fuels more expensive shifts incentives away from carbon-intensive activities, while providing revenues to build the green infrastructure we need. Most economists recommend a steadily rising carbon tax over time, and it must eventually be quite high.

      B.C.’s carbon tax was introduced in July 2008 at a level of $10 per tonne (2.3 cents per litre at the pump for those who don’t speak fluent carbon), and has gone up $5 per year to reach $30 a tonne as of July 2012.

      Since then, the government has been silent on next steps for the carbon tax. Budget 2013 marks a key decision about whether the carbon tax will continue to be increased. And as the May election approaches, we also need to hear where the NDP is on this subject.

      For a fair and effective carbon tax in B.C., some reforms are needed before we continue to increase the tax.

      First of all, the tax should be expanded to cover all industrial emissions, including process emissions (much of which are in the oil and gas sector) that currently go untaxed. They should also apply the tax to B.C.’s exports of coal and natural gas (at least until importing jurisdictions have their own equivalent tax).

      Second, to make the tax more fair the existing low-income carbon tax credit must be fixed, by increasing payments substantially and making them available to more households further up the income ladder. Additional credits to households in rural communities should be provided, since transportation alternatives are not readily available.

      A redesigned carbon credit could be designed, for example, so that the bottom half of households would receive a credit that, on average, is larger than carbon tax paid (meaning, they would be net beneficiaries), while 80 percent of households would receive at least some amount. Under such an approach, the heavy lifting is accomplished by households with higher incomes—those who already have the largest carbon footprints.

      Third, we need to use carbon tax revenues to support complementary climate actions like building retrofits and public transit, as Metro Vancouver mayors have urged. Using the revenues to build the infrastructure we need for the 21st century would also support tens of thousands of new green jobs—far more than B.C. would see from building new fossil fuel infrastructure in the form of pipelines and LNG facilities.

      Continuing with annual $5 increases would lead to a carbon tax of $50 per tonne by 2016. Expanded to cover all industrial emissions, it would raise over $2 billion per year. Applying the tax to exports could raise several billion more because B.C.’s exported emissions from coal and natural gas are much larger than emissions within B.C.

      This is a win-win opportunity for B.C. We can wean our economy and export profile off of polluting fossil fuels, create new jobs and be global climate leaders, fuelled by a progressive carbon tax system that reduces inequality as it raises the price of emitting greenhouse gases.

      Comments

      4 Comments

      Ali Said

      Jan 15, 2013 at 8:47pm

      When Mark Lee uses Sandy for argument he forgets conveniently the real trend in hurricanes 9down) as compiled by Dr Ryan Maue. As for his Carbon tax, I wish he had the honesty to explain there is a glut of carbon credits -hence their value near zero and the closure of the CCX in Chicago- and those heavily invested in them are pushing for complicit governments to force policies onto the public. There has never been a referendum about carbon taxes, never. It is always shoved onto taxpayers as per the Jaccard tax example or the Gillard aussie carbon tax about face.
      Marc Lee rides on the gullible and the envious in order to save his friends marbles in the carbon game.

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      Stan Mortensen

      Jan 15, 2013 at 11:40pm

      I guess the real option would be that we adopt the "Amish" way of living.
      I am certainly not opposed to addressing environmental issues but the dollars and senses seem to out of whack.

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      Gilbert Marks

      Jan 16, 2013 at 8:21am

      " carbon tax deserves some of the credit for B.C.’s drop in GHG emissions, down 4.5 percent as of 2010 relative to 2007 levels."

      Gee maybe the ECONOMY might have had something to do with it. Did'ya include methane emissions from gas production - 100 times as potent as CO2 as a GHG. No eh!!!

      Unfortunately, carbon tax/credits like the wind/solar/gas scam are simply measures Big Oil uses to make sure nothing effective is done to reduce/eliminate fossil fuels, while at the same time making the rubes believe that the solution is just around the corner. You can do that when you own all politicians ,Big Media and even have managed to purchase organizations like Pembina, Greenpeace and Sierra. So effective is the propaganda that the very folks that believe in global warming are the ones that are most responsible for ensuring that nothing gets done about it.

      In fact in BC, fuel consumption stayed the same, despite a 50 cents a liter Big Oil imposed gas tax ($200 a ton carbon tax) while the governments $30 per ton carbon tax did nothing to reduce CO2. Sales of vehicle fuel in BC actually increased 2007 to 2010 and 2011. Carbon taxes don't account for the 75 times more potent GHG methane emissions from production and pipeline leakage which increased enormously BC GHG emissions after the carbon tax imposition.

      Carbon taxes don't work because there are no real alternatives.

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      Steve_W

      Jan 17, 2013 at 10:23am

      BC's carbon tax has nothing to do with reducing CO2 emissions.
      It is strictly a revenue generator for government coffers.

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