British Columbia Begins Taxing Carbon
Today is July 1, and that means North America’s first ever carbon tax will take effect in the Canadian province of British Columbia.
The carbon tax, introduced in the Feb. 19 budget, taxes carbon-based fuels like gasoline, diesel, natural gas and home heating fuel. The rate of taxation is $10 (Can.) per ton of greenhouse gases generated. The carbon tax will rise $5 a ton for the next four years until it hits $30 per ton in 2012. The tax increase works out to an extra 2.4 cents a liter on gasoline, increasing to 7.24 cents per liter by 2012.
The government has said all carbon tax revenue (roughly $1.8 billion over three years) will be returned to British Columbians through reductions to income and business taxes. But with rising gasoline prices, the addition of the new carbon tax will certainly be making some British Columbian drivers cringe when they fill up at the pump.
In an op-ed piece at the Globe and Mail, Gary Mason points to the political battle brewing as these two economic forces collide and drive up fuel prices. Mason cautions that knee-jerk reactions from the “well-orchestrated but morally bankrupt campaign led by the NDP Opposition” will only feed the division between those who think the tax is the right way and those who don’t. Mason writes:
“Suddenly, it’s being viewed as a financial burden in a way it wasn’t before. Now, combined with the current price of gas, the tax is forcing people to seriously contemplate changing their emissions-producing ways, which is precisely what it was intended to do.
Still, it wouldn’t take much for people in B.C. to recoup the money the carbon tax will cost them. They could do it by driving into the office four or five times less a year or taking transit the equivalent of a couple of weeks. They could also do it by implementing any number of cheap, energy-saving measures in their homes.
But the NDP in B.C. doesn’t want you to believe that. It just wants people to feel rage over how “wrong and exploitive” the tax is. I say don’t listen to the NDP’s leaders, because what they are doing is playing politics with the planet.”
Other posts about the BC carbon tax:
“Canada Unleashes First Carbon Tax in North America”:: gas2.0
Photo: woody1778a via flickr under a Creative Commons License
“Suddenly, it’s being viewed as a financial burden in a way it wasn’t before. Now, combined with the current price of gas, the tax is forcing people to seriously contemplate changing their emissions-producing ways, which is precisely what it was intended to do.”
Actually the price of Oil is doing what the Carbon Tax intended to do and the tax, if energy costs were what they were at the beginning of the year, would have not have been a burden, but now is just adding fuel to the fire.
The problem is this is the first step in a two step plan to raise the price of everything.
We have Cap and Trade coming in the fall courtesy of the Western Climate Initiative to further punish BC Business and there is no revenue nuetral plan for that. I have commented and blogged about this tax since the beginning of the year and even created a simulation of the effect of regional reductions and overall tax burdens based on neutral revenue tax policy. The results clearly show a shifting of tax burden onto regional areas and penalizing of rural communities, especially satellite cities around population centers.
If we all use less, we pay more income tax (Revenue Nuetral), the return is not 1=1 on the taxpayer level and has no regional application formula. Northern BC is 30C cooler in the winter then the South Coast. Additionally any program deemed to be of social benefit can count in nuetrality. With the economy starting to wane, the low income home heating and energy subsidies will eat through the first year carbon tax revenue by February.
The Government will have to decide if the carbon tax goes up faster ( clearly set as an option in the budget ) to meet this social progam demand or that Income taxes go up to meet the threat of budgetary deficit.
Take a look at the Federal Liberal Party “Green Shift” plan and you will see it has some of the regional shortfalls I discussed here addressed, but still works to simply fund social programs.
If BC taxes CO2 at $30 per ton in 2012, this figure is comparable to estimates that CO2 can be removed from the atmosphere in a few years for between $30 and $50 per ton.
It would only be fair if the government also paid people $30 per ton for removing CO2 from the atmosphere.