British Columbia Passes Heavy Tax on Carbon Emmissions
By Mark Hume / February 20, 2008
VICTORIA — The government of British Columbia moved yesterday to the forefront of the battle against climate change by introducing what may be the greenest budget ever seen in North America.
Finance Minister Carole Taylor said the budget – which has a new, sweeping carbon tax as its centrepiece – is a historic turning point for the province, although critics pointed out it also contains incentives for oil and gas development and funding for new highways.
“It has been a dramatic turn, I think, for this province with this budget to say we’re not just going to be talking about climate action. We are acting. We are putting in place the financial foundation that will make it possible,” Ms. Taylor said in a budget briefing session as she focused on the carbon-tax initiative.
She said the strategy is to “tax something that we know is bad for us,” and use the revenue to stimulate wide social change by providing incentives for people and businesses to become more energy efficient.
Wearing an impeccable green suit, Ms. Taylor said the B.C. government aims to raise $1.8-billion over the next three years by applying a carbon tax to virtually all fossil fuels, including gasoline, diesel, natural gas, coal, propane and home-heating fuel.
She said the carbon tax will be revenue neutral because all of the money raised will be returned to businesses and individuals through an annual “climate action credit,” which will provide lower-income British Columbians with a payment of $100 per adult and $30 per child, and through a range of tax cuts.
Ministry officials said they have not been able to find a carbon-tax scheme of similar scope anywhere else in North America and they doubted few jurisdictions globally could surpass it for its broad reach.
“This is an important turning point for British Columbia and we think for Canada because we are out in front on this. We don’t want to wait until we get a consensus. We think it is important to take the first steps,” Ms. Taylor said.
She said her business-friendly government is striving for a balanced approach as it tries to make progress on the environmental front without hurting the economy.
“It is an interesting challenge to say that we are going to take dramatic action on the climate-change problems that the world is facing, but at the same time insist that we are going to work to strengthen our economy,” she said.
The carbon tax, which takes effect on July 1, will be phased in starting at a rate based on $10 per tonne for carbon emissions, rising to $30 per tonne by 2012.
The price of gasoline will increase by 2.41 cents a litre this year, rising to 7.24 cents a litre by 2012. The cost for diesel and home-heating oil will increase 2.76 cents a litre this year, increasing to 8.27 cents a litre in five years.
Ms. Taylor said that over the next three years the carbon tax should reduce carbon emissions by three million tonnes.
B.C.’s goal is to reduce carbon emissions by 33 per cent below 2007 levels by 2020 – a target that clearly won’t be met by the carbon tax alone.
Ms. Taylor said the carbon tax is “just one piece of the puzzle” and more initiatives, including a cap and trade system expected this fall, will be needed.
She said it will be up to future governments to decide whether the carbon tax should rise above the $30-per-tonne rate.
Asked why B.C. wasn’t waiting for a federal plan to emerge, Ms. Taylor said the province has set “very aggressive” carbon-emission targets, and simply couldn’t wait to act.
“It is our decision as a province that we must start now,” she said.
Ian Bruce, climate-change specialist with the David Suzuki Foundation, described the carbon tax as “a landmark decision” that puts B.C. in a leadership role in North America.
“The government is using the most powerful tool it has at its disposal to reduce greenhouse-gas emissions,” he said.
“Global warming is a big problem and it requires big solutions. So there is going to be more that we need to do into the future. But today I think the government showed some real leadership,” Mr. Bruce said.
Chloe O’Loughlin, of Canadian Parks and Wilderness Society, and Gwen Barlee, of Western Canada Wilderness Committee, praised the carbon-tax initiative, but said the budget fails to recognize that climate change is already having, and will continue to have, an impact on the environment.
“I think the government has done a very good job on fighting carbon emissions, but there’s nothing on the other leg of climate change, which is adaptation. There’s nothing in the budget to protect biodiversity,” Ms. O’Loughlin said.
“This isn’t necessarily a green budget – it’s a greenhouse-gas budget,” Ms. Barlee said.
Will Horter of the Dogwood Initiative said the budget contains some serious contradictions in that it provides subsidies for oil and gas exploration, and supports highway and pipeline building, while trying to reduce carbon emissions.
Ten environmental groups issued a budget report card that gave the government three A’s – for carbon pricing, spending on transit, and incentives for citizens and businesses to become more energy efficient. But the government got an F for consistency, because it increases oil and gas subsidies, and a D for failing to protect biodiversity.
John Winter of the B.C. Chamber of Commerce said the carbon tax may be easier on those in urban environments than those in rural areas who have limited transportation options.
And he said it will be hard on some “high-intensity energy users,” such as some mines.
“But generally speaking it’s good. We were prepared to be aggressively negative … so I think we find ourselves surprisingly encouraged by the balance of the budget,” Mr. Winter said.
Maureen Bader, B.C. director of the Canadian Taxpayers Federation, was critical of the budget.
“It will create hardship for families, as soccer moms are unlikely to start walking.” During her budget briefing Ms. Taylor said she would spend her $100 climate-action credit to buy a new pair of running shoes, because she’d worn holes in her current ones walking to work in a personal commitment to fight climate change.
From Steve Russell / The Rag Blog
