NRT: Climate change: A carbon tax in action

Written By: - Date published: 10:04 am, June 12th, 2014 - 5 comments
Categories: climate change, ETS, greens, national, same old national - Tags: , ,

no-right-turn-256Reposted from No Right Turn.

Earlier in the month, the Greens promised to scrap the gutted and ineffective Emissions Trading Scheme and replace it with a carbon tax. The government immediately claimed that the sky would fall if we stopped subsidising polluters and allowing them to rort us. So will it? In 2008 British Columbia imposed a carbon tax. The sky didn’t fall. Instead, it has done exactly what it was designed to do: reduce emissions while lowering taxes on ordinary people:

If the goal was to reduce global warming pollution, then the BC carbon tax totally works. Since its passage, gasoline use in British Columbia has plummeted, declining seven times as much as might be expected from an equivalent rise in the market price of gas, according to a recent study by two researchers at the University of Ottawa. That’s apparently because the tax hasn’t just had an economic effect: It has also helped change the culture of energy use in BC. “I think it really increased the awareness about climate change and the need for carbon reduction, just because it was a daily, weekly thing that you saw,” says Merran Smith, the head of Clean Energy Canada. “It made climate action real to people.”

It also saved many of them a lot of money. Sure, the tax may cost you if you drive your car a great deal, or if you have high home gas heating costs. But it also gives you the opportunity to save a lot of money if you change your habits, for instance by driving less or buying a more fuel-efficient vehicle. That’s because the tax is designed to be “revenue neutral”—the money it raises goes right back to citizens in the form of tax breaks. Overall, the tax has brought in some $5 billion in revenue so far, and more than $3 billion has then been returned in the form of business tax cuts, along with over $1 billion in personal tax breaks, and nearly $1 billion in low-income tax credits (to protect those for whom rising fuel costs could mean the greatest economic hardship). According to the BC Ministry of Finance, for individuals who earn up to $122,000, income tax rates in the province are now Canada’s lowest.

So what’s the downside? Well, there really isn’t one for most British Columbians, unless they drive their gas-guzzling cars a lot. (But then, the whole point of taxing carbon is to use market forces to discourage such behavior.)

Meanwhile, under our ETS, New Zealand’s emissions are once again increasing.

From the BC example, this is a simple, effective policy. The “downside” is that it actually works, and that polluters have to pay or change their behaviour. And that’s not a downside at all.

5 comments on “NRT: Climate change: A carbon tax in action ”

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  1. greywarbler 1
    12 June 2014 at 10:17 am

    National – the Do Nothing till… Party.

    Do nothing till you hear from me.

    As Ella Fitzgerald so beautifully puts it –

    (And ‘me’ isn’t you and I, it is the clique that runs the National Party to organise the country for the clique’s benefit.)

  2. Johnm 2
    12 June 2014 at 11:59 am

    ETS or Carbon Tax, both are just counters in the game: “Let’s pretend we can stop climate change”. The fact is it’s too late and we’re in for severe climate problems which will transform our World for the worse and demolish much of what’s left of our civilisation. So, let’s pretend that’s not true and go back to our comforting tiddly winks!

  3. Colonial Viper 3
    12 June 2014 at 12:03 pm

    Sigh. as someone commented a week or two ago when this first came out. Let’s debate which option is better at having no chance of affecting climate change in the slightest.

  4. ghostwhowalksnz 4
    12 June 2014 at 12:34 pm

    This doesnt make sense.
    The example you give for BC is a carbon tax of 6.67c per litre. The total price per litre shown on the pump is $1.44.

    This drives big changes in fuel use ? You must be kidding. Its hardly noticeable

    In NZ the ACC levy alone is 9.99c litre . Has this changed driving habits ?

    The idea that there has been a big change is wishfull thinking, the details arent clear what the reduction in amount of fuel used is. Which is a clue it cant be that much.
    I can give a lot of reasons, more economical vehicles for one. The other one would be the timing , at the start of the GFC. This almost certain to be the principal reason for the decline.

    We have an ETS, National may have decided to let the tax payers shoulder the payments instead of those emitting CO2 ( why there hasnt been a political price to pay is a mystery to me), but that can be reversed once they lose the election.

    • ghostwhowalksnz 4.1
      12 June 2014 at 1:09 pm

      Ive found some figures for the sales of gasoline in British Colombia

      2008 4,467,000,000 litres

      2012 4,348,000,000 litres

      http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/trade37c-eng.htm

      As I thought, its a crock of shit about the slow increase in carbon tax ( 2c per year) having a marked effect on petrol consumption.

      For gods sake a roughly 2.5% decline over 4 years !! That will keep the snow at the BC snowfields.

      Of course its better they have some sort price for emitting CO2, but please dont use dodgy numbers to say a carbon tax is far and away better than an ETS

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