FIVE POINTS ON PRICING POLLUTION – THE CARBON TAX & GLOBAL TRANSITION
“Imagine a world where each decision maker, public or private, has to pay the real cost of pollution.”
Honourable Stéphane Dion, Canada’s Minister of Foreign Affairs
1.The earth has warmed .85°C since 1880.
At the Paris Climate Conference on Sunday, Canada announced our intention to support initiatives to limit further warming to 1.5°C.
350.org has pointed out that “even limiting to 2°C would take a fundamental transformation of the global energy system and 80% of fossil fuels would have to stay in the ground. To hit the 1.5°C target would take the world doing a massive shift from fossil fuels to 100% renewables now.”
2. How are we going to make this shift? One of the ways is to put a price on carbon.
“Is it really all about Carbon?”, asked Bernadine Bednarz, of Los Angeles, Calif. in the New York Times.
Justin Gillis replied that “when you hear about carbon taxes, carbon trading and so on, these are shorthand descriptions of methods designed to limit greenhouse emissions or to make them more expensive so that people will be encouraged to conserve fuel.”
The legendary climate scientist James Hansen has consistently called for a world wide Carbon Fee measured in dollars/ton of CO2 emissions. The fee would be charged by governments at each point of fossil fuel extraction and every port of entry, and quickly rise in price until it reflects the true cost of fossil fuels.
“An economic analysis indicates that a tax beginning at $15/ton of CO2 and rising $10/ton of CO2 each year would reduce emissions in the U.S. by 30% within 10 years. Such a reduction is more than 10 times as great as the carbon content of tar sands oil carried by the proposed Keystone XL pipeline (830,000 barrels/day). Reduced oil demand would be nearly six times the pipeline capacity, thus the carbon fee is far more effective than the proposed pipeline.”
Hansen is alarmed but he still has hope the carbon fee will be utilized to avert climate catastrophe.
3. The Carbon Fee or “tax” is a simple and fair method of pricing pollution.
Carbon Fee (and Dividend!) – How it Works:
The fee adds cost to all fossil fuel, and hence promotes energy conservation and efficiency as well as stimulates renewable energy. For example, the commercial sector implements innovative methods to use less energy, keep costs down and stay competitive. For families and individuals the higher fuel costs promotes the use of vehicles with better fuel economy and public transit, biking or car sharing.
In other words, wasting energy brings a penalty via the extra fee. Conserving energy brings a dividend. A dollar saved is a dollar earned, as the adage goes. Fossil fuels are saved.
My home province of British Columbia has a Carbon Tax. All money the government collects from it goes back to individuals and business through incentives and benefits, mostly reduced income tax. This makes it “revenue neutral”, which is key.
This chart shows how the 5 Billion dollars of Carbon Tax was disbursed. . .
Note that less Carbon Tax was collected than disbursed. The Carbon Tax stimulated the reduction of fossil fuel consumption more than estimated. Put another way – less fuel was sold and hence less tax was collected. More tax cuts and benefits were paid out than necessary.
Here are the results of British Columbia’s reduced dependence of fossil fuel (hence, reduced emissions) according to Statistics Canada:
Previous to the implementation of the BC Carbon Tax in 2008, fuel usage was rising in British Columbia. As a direct result of the Carbon Tax, from 2008 to 2013 fuel use in our province dropped by an amazing 16.1% – it rose 3% throughout the rest of Canada.
Currently in British Columbia, the Carbon Tax has increased the price of gasoline by about 7 cents per litre (25 cents per gallon), to $1.25/litre. Me and my wife Francis receive from the provincial government a quarterly deposit into our bank account called the “Carbon Tax Credit”. In addition, our annual income tax rate has decreased.
The BC Carbon Tax Shift was implemented only months before the 2008 economic meltdown and the American bank bailouts. Some analysts predicted economic chaos for British Columbia. That never occurred.
The Carbon price was set low in the first year, then grew gradually until 2012 when it reached $30/ton of CO2 emissions (or Green House Gas equivalents). It was originally conceived to rise annually at $10/ton. Unfortunately the BC government froze it at $30.00/ton, claiming that other United States jurisdictions hadn’t implemented the Carbon Taxes as originally promised.
This past November 2015, the new NDP government in neighbouring Alberta legislated a new Carbon Tax to reach $30/ton of CO2 emissions by 2018. Alberta is home to Canada’s mighty tar-sand industry that emits 8.5% of Canada’s greenhouse gas emissions. The Carbon Tax is a step in the right direction.
What the World Needs Now, is . . .
4. Limit warming to 1.5°C
Canada and the world needs to have a much higher price on carbon.
Progressive economists, insurance analysts, and climate experts say that Carbon Tax needs to reach at least $100.00/ton of CO2 emissions, to begin to reflect the true cost of burning carbon based fuel.
Sweden has had a carbon tax since 1991, currently priced at $130.00/ton of emissions. The carbon tax, along with other innovative policies, enabled them to reduce their emissions by 20% over 20 years and reach their 2012 target for the Kyoto Climate Protocol of 1997.
We all need to do so much more, of course. . .
5. We are entering the Solar Age and the Post-Carbon Era
Dream for the Earth: Let’s Make it Happen
Here is an appeal from the Honourable Stéphane Dion,
Canada’s new Minister of Foreign Affairs:
“Imagine a world where each decision maker, public or private, has to pay the real cost of pollution and where we all know that our partners and competitors have to pay for this cost as well. In such a world, political rulers would still think of their own jurisdiction’s welfare first but their decisions would be more mindful of the global commons.
Putting a price on pollution: this is what the overwhelming majority of economist, scientists and environmentalists – and a few foolhardy politicians – have been urging us to do for years. …a universal harmonized carbon price.
We need a world where pollution is no longer cost-free. We need to switch from self-destructive development to sustainable development. Action on this survival necessity and moral imperative is long overdue; it will require individual commitment, business support and political will.”
~ Bruce ~