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

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Introduction: 

1.The earth has warmed .85°C since 1880.

slides0092 (4)a - bruce witzel photo

 

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.”

 

Buffola Wind Turbines, April  2008 - photo & effects, Bruce Witzel

 

Pricing Carbon:

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.”

(source – Assessing “Dangerous Climate Change”: Required Reduction of Carbon Emissions to Protect Young People, Future Generations and Nature – James Hansen, et. al., Dec. 3, 2013)

Hansen is alarmed but he still has hope the carbon fee will be utilized to avert climate catastrophe.

 

NASA Scientist James Hansen Arrested

 

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.

 

a study of contradictions - bruce witzel photo-2

 

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. . .

Cumulative BC Carbon Tax revenues and tax cuts - 2008-2104 - source, Sightline Institute

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.

Downtown Montreal - Bruce Witzel photo

 

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.

 

California oil well - bruce witzel photo

 

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.

 

Alberta Rockies and oil - bruce witzel photo

 

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. . .

 

New Denver BC bulletin board - bruce witzel photo

 

5. We are entering the Solar Age and the Post-Carbon Era

 

Dream for the Earth: Let’s Make it Happen

 Boulder Recreation Center - City of Boulder, Colorado

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.”

 

 

 

 

 

 

 

Cheers

~ Bruce ~

Our cabin with the wind generator - B.Witzel photo

Transition: WPC

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10 thoughts on “FIVE POINTS ON PRICING POLLUTION – THE CARBON TAX & GLOBAL TRANSITION

  1. Hi Bruce: Thanks for your work on this post. I love the picture of your house and hills and windmill. High winds and heavy rain today. If only we had micro-turbines on our down-spouts! We’d have power to spare! That said I think we need a lot more discussion and effort on the “demand” side of the equation. I just read Carrie Saxifrage’s book, “The Big Swim” where she discusses working through the emotional side of dealing with climate change and making a commitment to not fly (Carrie is from Cortes Island). Worth a read. Best wishes. Keep writing.

    • Hi Chris. That’s funny about your downspouts. It might even create a few watts and work! 🙂 Yes, the demand side we need to work on. The Big Swim book looks like it would be a good read. I’ll put it on my list. Last night I started “Reclaiming the Commons for the Common Good – (A Memoir and Manifesto) by Heather Menzies. First part is about rediscovering her roots in the Highlands of Scotland – good so far. It’s wonderful to hear from you… Thanks.

    • Your welcome Rosaliene. Stephane Dion is a hero to me – he had a dog he named Kyoto 🙂 And he almost became Prime Minister in Canada a decade or so ago. A main platform of his campaign was to have Canada implement Carbon Pricing. Unfortunately Harper and the Conservatives defeated him then. I’m so glad Stephane’s back with our newly elected Liberals.

  2. Thanks, Bruce. And always, incentive is linked to economics. Well, it’s possible to keep paying and keep polluting. How do we link incentive to ethic and make an impact? Is anyone interested in acting morally or just economically?

    • Your welcome Priscilla.

      Ethics vs. economics. Similiar to the the difference between energy conservation and energy efficiency. Two sides of the same coin…

      On the one hand, I choose to put on a sweater or turn off the light as I leave a room, because it is the ethical thing to do. On the other hand, I could also choose to invest in new efficient windows (if I have the extra money) because it will save me energy and then money, over time. As a side effect I am more comfortable. My quality of life increases because there are less drafts.

      Or as you say, I can do nothing and end up just paying more to keep on polluting, turning up the heat or the air conditioner and flying around buying more “stuff”.

      Some people do nothing. Some choose only the economics. Others are ethical. And some choose (or are able) to act ethically and economically.

      As you know well, the ultimate bottom line is that the atmosphere can’t keep on receiving more and more GHG without major loss of biodiversity and harm to all. I wonder if the earth recognizes where a reduction in emissions might come from. Hmmm … it might.

      Does the means ever justify the end?

      For myself , I stay away from Walmart no matter how many Solar Panels they put on their buildings.

      • I stay away from Walmart too. My wife and I try to achieve 50% ‘car-free days.’ So far we’re over that this year, but we live in a small town where we can bicycle to the post office and grocery stores.
        You mentioned the tar sands in Alberta. If you get a chance, listen to this panel discussion. I could listen to Jeff Rubin all the time and Dermot Foley is great too. https://www.youtube.com/watch?v=sAm1Ghoyvnw&list=PLsmpFKaeM8026Ao-JZQyESwdnKX4Q41Dt&index=13
        Okay, I’ve got to ‘fess up.’ When I can’t sleep I put one of these panel discussions on. “The Future of Canada’s Oil Sands in an Emissions Constrained World” is my favorite one. I’m probably the main reason it’s got 336 views. 🙂

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