Tuesday, September 16 2014

Tag » carbon tax

Climate change gridlock: What you can do

Last week the Council of the Federation (COF) meetings brought Canada’s 13 provincial and territorial premiers to Winnipeg to discuss issues of importance to the country. They had a full plate, and outcomes included requests for the federal government (related to launching a Canada-India economic partnership and negotiating an open skies agreement, among other topics) and some interesting new initiatives, such as endorsing a water charter and agreeing to consolidate purchases of prescription drugs and medical supplies. But the provinces couldn’t agree on a plan to tackle a major concern of many Canadians: climate change.

According to this article by PostMedia reporter Jason Fekete, while the provincial leaders could agree that action on climate change is crucial, their preferred approaches are far from consensus. It’s worth reading the article, but in a nutshell, the leaders of B.C., Ontario, Quebec and Manitoba favour a cap and trade system where companies that exceed emissions targets could purchase carbon credits from greener firms. The leaders of Alberta and Saskatchewan, on the other hand, are in favour of pursuing carbon capture and storage programs (despite the fact Alberta has a form of cap and trade already operating in the province).

Ultimately, the meeting is yet another example of political gridlock on climate change. We’ve seen this at the federal level in Canada, south of the border (which many in Canada feel needs to be settled before we can make our own plan) and internationally. Back in December 2009 The Economist proclaimed climate change as the defining issue of the century, saying: “Climate change is the hardest political problem the world has ever had to deal with. At issue is the difficulty of allocating the cost of collective action and trusting other parties to bear their share…”

So what can individuals do while we wait for political leadership on climate change? Plenty. First, simple steps to conserve energy, such as those recommended by leading environmental groups WWF-Canada and the Pembina Institute, can have a major impact when done collectively. Second, you can ensure that your elected official keeps climate change on the front burner by calling or writing your MP or provincial representative. Third, you can vote with your wallet by choosing products and services that are less harmful to the earth. To this point, by voluntarily paying just a little more (less than a dollar a day for the average home), Canadians in most provinces can make a 100% clean electricity choice with Bullfrog Power. In doing so, they reduce their electricity-related carbon emissions footprint and support the development of new wind power in Canada.

We would like to hear from you on the COF meetings. What are your thoughts on what was achieved at the meetings―and the premiers’ inability to develop a united strategy on climate change?

Theresa Howland
Vice President, Western Region, Bullfrog Power


Posted on August 10, 2010

BC shows positive carbon tax results

The early results of BC’s carbon tax are in, and the results are promising. As Stewart Elgie, one of the founders of Sustainable Prosperity notes in an op-ed in the Ottawa Citizen, the BC carbon tax has been a success on many levels:

The BC carbon tax puts a price on carbon emissions. The price is currently $20/tonne of CO2, rising at $5 annually.

Fiscally, the tax is a success because it has remained revenue neutral – in other words, the revenue raised by the tax has not added to government tax revenues. In fact, the tax has been more than matched by tax cuts and credits – in 2008 and 2009, the tax raised $846 million, and the cuts and credits for taxpayers totaled almost $1.1 billion. Furthermore, the tax does not appear to have hurt BC’s economy – BC’s rate of economic growth post-tax is higher than Canada’s, and unemployment does not appear to have increased following the tax. From a policy perspective, unlike most other taxes, the BC carbon tax succeeds in discouraging “bads” rather than “goods”, thereby incenting behaviour that is less carbon intensive. And from an environmental perspective, the projections are that the tax will lower the province’s emissions by 5%.

Tom Heintzman
President, Bullfrog Power


Posted on July 27, 2010

A carbon tax to boost Britain’s economy: Interesting findings from a new Economist study

This blog has advocated for a carbon tax, but a recently commissioned study by The Economist sheds some light on the intricacies of getting the details of the tax right.

The Economist’s study examined the impact of a carbon tax on Britain’s economy. The study looked at two scenarios: one applied a carbon tax that would raise 1% of GDP by 2020; the second set the tax at a level that would guarantee the country meets its 2020 GHG emissions targets (reduce emissions 34% below 1990 levels by 2020). The study assumed that all other funding, subsidies and economic programs related to advancing renewables or adhering to climate change policies were dropped.

Results from the first scenario indicate a carbon tax would actually improve Britain’s economy. The publication summarizes the results: “electricity prices fall as expensive subsidies for renewable energy are replaced by the carbon tax [resulting in an increase in gas-fired power generation]. That provides an economic boost, the government gets an extra revenue stream, and output is 2.5% higher come 2020 than in the baseline scenario.” Read more about the results here.

According to the study, GHG emissions increase slightly in this scenario. The author is optimistic, however, and notes in the article’s addendum that the tax could be adjusted to help bring about a reduction in emissions, although presumably at the expense of some of the GDP increase.

The second scenario demonstrated that it is virtually impossible for Britain to achieve its 2020 goals because a carbon tax would have to be excessively high in order to result in the magnitude of change required. According to the addendum, the tax would reach “many hundreds of pounds per ton, far beyond anything that could be seen as politically plausible…” This scenario hints at the fact Britain may need to revisit its emissions targets. While progressive action by governments is encouraged, setting unrealistic goals can be detrimental to environmental strategies, deflating government and public support if progress is made too slowly or too late.

Ultimately, this study is helpful because it takes the carbon tax debate to the next level, and examines how it should be structured and what its impact would be. The author concludes that the first scenario is “worth a try” and still better and more efficient than Britain’s current mix of environmental arrangements.

Tom Heintzman
President, Bullfrog Power


Posted on July 7, 2010

Carbon tax to drive domestic productivity and strengthen trade with Europe, according to new article in the Toronto Star

We encourage you to check out the article “Hamilton: It’s time to talk carbon taxes” in yesterday’s edition of the Toronto Star.  In this bold article, the Star’s Energy and Technology Columnist Tyler Hamilton takes a strong position on a carbon tax—as a solution to Canada’s innovation and productivity challenges (Hamilton cites the report, Carbon Pricing, Innovation and Productivity, the subject of our last blog post), as a better alternative than a cap-and-trade system when it comes to energy and climate change policy, and as a transparent and effective program that has simply been undersold to Canadians.

The article also points out that carbon pricing is vital to maintaining our healthy—and growing—trade relationships with Europe. Our inaction on the environment, on the other hand, may hinder international trade, affecting the success of Canadian exports in Europe. From the article:

The European Union, which had already committed to reducing its greenhouse-gas emissions to 20 per cent below 1990 levels by 2020, now plans to increase that target to 30 per cent below 1990 levels. Canada’s goal is a laughable 2.5 per cent below 1990 levels.

This huge gap – let’s call it a “carbon gap” – could cause some major trading pain with Canada’s second-most important trading partner, which is growing tired of doing all the heavy lifting on the climate-change file. In fact, it has led to calls within the EU for serious consideration of border adjustments, which are taxes (tariffs) imposed on goods imported from non-EU countries, such as Canada, that have less stringent greenhouse-gas controls.

Read the full article here and let us know what you think.

Tom Heintzman
President, Bullfrog Power


Posted on July 6, 2010

Time for a Great Canadian Carbon Refund!

In today’s Toronto Star Martin Regg Cohn writes that it is (once again) time to revisit the issue of a carbon tax. You can read the full article here. He suggests that instead of calling it a carbon tax, the feds should call it an “interim carbon levy” or a “pollution surtax”.

This reminds me a of a conversation I had with my mother a few weeks ago. After mulling over all the political challenges with putting a price on carbon, we concluded it should be called a “carbon refund”. Everyone likes getting refunds, right? Carbon refunds would be very simple – the government would collect a levy from carbon producers at source (primarily from oil, gas and coal produced or imported for use in Canada) and would then refund all the money it collected to Canadian citizens. True, the cost of fossil based fuels would go up, but you’d get a refund. Focus on the refund! Politicians would be a lot more successful securing the support of ordinary Canadians for a carbon “refund” than they have been pitching a carbon “tax”. For example, every Canadian could receive a specified amount based on income bracket. The system could therefore be set up to pay out more to low-income families to ensure they are not unfairly hurt by higher fuel prices. Want a bigger carbon refund each year? No problem, just increase the levy and there is more for everyone!

Of course, I realize that there is a lot of pain involved with restructuring our economy to be more carbon efficient, and I don’ t mean to underestimate the effort involved – but let’s at least start thinking about all those refunds!

Greg


Posted on May 4, 2010