Arguments
How I lived through a carbon tax and survived to tell the tale
Posted on 8 April 2011 by Dan Moutal
A guest post by Dan Moutal, the voice of the Irregular Climate Podcast. Follow him on Twitter @ScruffyDan
Just over three years ago the province of British Columbia (BC) on Canada’s west coast implemented a revenue neutral carbon tax. And the world didn’t come to an end.
But three years on it is easy to find people who continue to unfairly criticise the policy and show that they simply don’t understand it.
For example this article from the New York Times:
John Hunter despises [the carbon tax].
"I've already insulated my house to be energy efficient. I already turn down my thermostat. Why should I have to pay $20 on my natural gas bill for something that is doing nothing for me?" the 64-year-old engineer said in an interview from his home in North Vancouver, British Columbia. His anger about the C$21.85 charge on his C$263 December bill prompted a protest op-ed in a local Vancouver paper. (One Canadian dollar equals roughly 1.02 U.S. dollars.)
What John Hunter might not realize is that the the carbon tax here in BC is revenue neutral. Meaning that every penny collected by the tax is returned to the public in the form of tax rebates (aka cheques in the mail) and lower income and corporate tax rates. So while John Hunter might have to pay a little extra to heat his home, he gets to keep more of his income in his pocket, and so does his employer. In fact it is entirely possible that Mr Hunter’s income tax savings are a fair bit larger than the $20 monthly charge on his home heating bill.
And since Mr Hunter has already taken steps to insulate his house and make it energy efficient, he is emitting less carbon and thus paying less taxes. The carbon tax gives people some amount of control over how much taxes they end up paying. Instead of taxing the good (aka income), the carbon tax taxes the bad (aka GHG emissions). Emit less and you pay less taxes.
In fact thanks to the carbon tax, BC has the lowest income tax rates in Canada for people earning up to $118,000, as well as very low rates of corporate and small business taxes.
Yet that is rarely mentioned when the tax is criticized.
But let's back up a little; what exactly is the carbon tax policy here in BC? I need to be upfront and say that the tax here is modest. It started out at $10/tonne and has been increasing by $5 each year untill it reaches a maximum of $30/tonne in 2012. And as I mentioned earlier, all the money raised by the tax is refunded back to residents and businesses in BC.
So how has my life changed since the introduction of the tax? The short answer is that it hasn’t really changed much at all. The biggest change is that I get quarterly carbon tax rebate cheques from the government, because I fall into the low income tax bracket.
Sure gas and home heating is a little more expensive. But the economy did not collapse and I am proud to say that at no time did we travel back in time to the Stone Age.
And that price on carbon is exactly the point. By pricing emissions there are now greater incentives everywhere to reduce greenhouse gas (GHG) emissions. Activities or products which lead to lots of emissions are now relatively more expensive, while their low carbon counterparts are not. This leads to millions of small individual choices that result in less emissions. Those renovations Mr. Hunter made will pay for themselves sooner than they otherwise would, because of the carbon tax.
But there are limits to what a modest carbon tax like the one here in BC can do. At the maximum rate of $30/tonne, the results will never be sufficient to reduce BC’s GHG emissions enough to avoid the worst impacts of climate change, to say nothing of the GHG emissions of the rest of Canada or the world for that matter.
For that the carbon tax would have to be higher, with coresponding larger tax decreases elsewhere, and apply to a much larger jurisdiction.
Here in BC we have just taken a successful first step.
SRES scenario is far from covering the whole set of possibilities ? Now it is unclear for me what you're really calling "BAU", since they already encompass a very large set of various trajectories. Could you please tell me what you mean exactly by "BAU" ? how do you recognize a "BAU" from a "non-BAU" scenario ? do you have a practical rule that I could apply without asking you, another time (when you may not be available to tell me if it is BAU or not ? )Michael sweet : for which facts are you asking for references ? ( -Snip- ).[mc] Another thread driven radically off-topic as predicted. Further comments that do not include some 'carbon tax' content will be deleted.
- The U.S. Armed forces
- Public education
- Public police and fire services
- he U.S. Center for Disease Control
- The Federal Emergency Management Agency.
All of these invaluable services can only be provided through socialism... i.e. through taxation, and the collective use of the gathered funds for the general welfare of society, organized and provided by the state. This fails because by the time the climate effects are so strong that they are painful enough to create a profit motivation, it will be too late to do anything about them. Then capitalist efforts will instead go into the more expensive prospect of mitigation, which will in turn go only to those with enough wealth to pay for it, leaving billions of people to suffer unimaginable hardships. This fantasy that completely unrestricted capitalism is the only answer to all problems is not only silly, but obscene. Human history is a list of failed and imperfect systems. They are all imperfect. Some are useless (communism, anarchism), some are good for some things but not others (socialism, capitalism), some worked at some points in human history but we have outgrown them (absolutism), and some are downright evil (fascism, totalitarianism). As intelligent human beings it falls to us to find meaningful solutions to problems using our intelligence, not to develop knee jerk allegiance to some methods (capitalism) and knee jerk abhorrence to others (socialism) just because that's what we grew up with -- in a completely different world (the Cold War) -- or because that's what Fox News tells us to think. The fact is that some sort of tax (cap and trade, fee and dividend, something else) is the only solution to this problem that will have an effect soon enough to make a difference (eventually people will do it because they believe in it, once it becomes that obvious and painful, but as I've said, if we wait that long to start it will be too late). But what falls to us now is determining what tax mechanism will work best, not whether or not to do it. The capitalist minded should have been in love with cap-and-trade, because that's a capitalism modeled tax, but it wasn't good enough. Fee-and-dividend should have been a good next choice for the only-capitalism crowd, because it puts all of the power into the hands of the consumer and the economy, and leaves the least room for abuse. That was similarly assaulted. It soon becomes clear that it's not the mechanism, but the idea of regulating the indirect cost of FF (AGW) that is what bothers people. I will point out two more things. First is oil industry subsidies. If you are so in favor of market pressures, why are we helping an industry that already controls the energy and therefore lifeblood of the world? Why are we tipping the playing field toward fossil fuel use? Second is tobacco use. There is an unseen cost there, in health costs, that is paid for by society, the largest segment of which benefits from neither the "joys" of smoking, nor the profits of selling tobacco. I object very strongly to having to pay for "their" healthcare (through my increased premiums) just so that "they" could foolishly and callously smoke and tobacco companies could make huge profits. How does that fit into pure capitalism? This this is exactly the same as FF use today. Those who benefit from FF will suffer the consequences, as will everyone else, but there is no direct tie between the use and the consequences. Most people, like you, are thinking (your words) "If FF are truly the issue," and aren't ready to take action until we suffer a Pearl Harbor type event and things are undeniable. But unlike in WW II, in this case, that would be far, far too late to do anything about it. What distinguishes human beings from animals is our intelligence. It is our ability to see things like this coming, and to avoid it rather than trust to luck, that separates us from 450 million years of evolutionary dead ends. Or so I hope.The availability of cheap energy is clearly off-topic. If you want to discuss that, please do so elsewhere, and allow the discussion of the topic of this article to continue uninterupted. You have made your point.