Canada Unleashes First Carbon Tax in N. America
British Columbia will be the first in North America to institute a comprehensive carbon tax on nearly all fossil fuels. It’s a groundbreaking move that could prove the feasibility of taxing greenhouse-gas emissions.
Beginning July 1st, 2008, businesses and residents of British Columbia will be taxed $10 per metric ton of carbon emitted by fuels such as gasoline, diesel, natural gas, coal, propane, and home heating fuel. The tax will increase yearly by $5 per ton to $30 per ton in 2012, at which point the government will reevaluate the tax rate.
Nicholas Rivers, an economist at Simon Fraser University, commented that “The tax comes in slowly, ramps up over time, and uses the revenue in a neutral way to reduce other distortionary taxes in the economy, which is just what economists have been recommending for more than a decade.”
While pundits have argued that this would never happen in the US, the tax was received with little opposition by residents of British Columbia. Designed to be revenue-neutral, the tax will return all of the income generated ($1.85 billion over 4 years) in the form of tax cuts and environmental rebates, and it should have little impact on the economy or competitiveness.
Even with this new tax, BC’s finance minister Carole Taylor says that by 2010 British Columbia will have the lowest total combined corporate tax rate (25%) among the world’s economies.
Which just happens to be one of the criticisms of the tax—that it will hit residents harder than major industry (isn’t that usually what happens?).
While the increasing price of polluting won’t dramatically effect emissions immediately (only 5-10% decline), the National Round Table on the Environment and the Economy (NRTEE) forecast that if the price of CO2 rose to $200 per ton by 2050, Canada’s emissions would drop 60% below current levels over the next 40 years.
I’ve always thought this was a great idea because it’s a relatively quick way to generate a huge revenue stream for alternative energy while reducing greenhouse-gas emissions. Even if it bumped up the price of gas a few cents, I’m not sure anyone would notice at this point.
What do you think about carbon taxes? Vote in the poll I started on the GreenOptions Discussion forums: Are carbon taxes a good or a bad idea?
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Source: ES&T (Mar. 17 08): First comprehensive carbon tax in North America
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Good day all
First, British Columbia is a province, not a city. The carbon tax sucks and it has not even been implimented yet. 2nd, Universal Health Care. If i get sick, injuried, I can go into ANY health faucility (sp) in Canada for treatment and it NOT cost me nickle one. I pay a health insurance premium every month for myself and family. I have a brother that lives just north of Seattle and pays $300.00 per month for health insurance for a family of 4. I pay $75 for a family of 3. Not a bad ROI.
I don’t know where these guys where coming from as they already know how hard it is for the average family to make ends meet because of the high cost impossed on many because of the steady influx of people moving in and out of the city. It looks like more are leaving and house prices are falling now thats pathetic for the number one city hosting the Olympics. The hight cost of energy is hurting many already here in Canada with the airlines letting many of their employees go. And the steady pace of jobs lost will continue and will even be harder for those living in BC facing the high cost of living because of the Olympics and now a tax to cause further hardship? It will cost them the election and that is the only good thing that will come out of it. If the Liberals solution to the hungry poor was to sell them the cities expired foods what are they going to do now that they can’t even afford to buy the cities garbage?
[...] at the pump, which should probably include the cost of climate change (in the form of a carbon tax) and some of the most expensive aspects of US foreign policy (I’ll let you fill in the [...]