Wednesday, 20 February 2008

British Columbia's New Carbon Tax

I hardly ever watch the TV news, but I was watching yesterday when I was pleasantly suprised to hear about BC's new carbon tax. The BC government outlined their budget yesterday, and it contained details about a tax on all types of fossil fuels. The tax will take effect on July 1st of this year. I will start out small and increase over time. It is "revenue neutral," in that other personal and business taxes will be lowered and a "Climate Action Dividend" cheque will also be paid out to each BC citizen. I'm glossing over some of the details, but you can read more about it here and here.

Not everyone is happy about the carbon tax, as you would expect, but I found one argument against it to be somewhat wrongheaded. A small business person interviewed on the newscast was unhappy that the government was "so quick to bring out the stick" with a punitive measure such as a carbon tax. But I don't think it's punitive at all. People who use less fossil fuel will be be able to keep more of their earnings - that's a reward, not a punishment! The business person could have just as easily asked why it's taken "so long bring out the carrot."

I would love to see other such 'carrots,' such as lower electricity rates for those who use very little, and higher rates for industries that consume in bulk amounts. I'd like to see progressive billing methods applied to all resources -- mass consumers would pay a premium for mass consumption and frugal users would be rewarded for using less. In my Utopian dream, this would mean that people in the lower income brackets could afford to heat their home in the winter and not have their water cut off.

So good for you, BC! You're the first North American jurisdiction to bring in a badly needed carbon tax! I hope the rest of North America follows suit, and quickly.

Picture courtesy this website.


CindyW said...

Hi there, found you through Green Bean. In general I am a fan of carbon tax because it can account for the carbon dioxide disposal cost which is currently being passed on to the general population and the next generations. No one likes taxes and admittedly tax policies can be implemented very poorly at times. However we have to account for the undesirable byproducts of our economy somehow, be it toxic substance or CO2.

Progressive billing on resource usage is a good call. It encourages savings while still providing services for people/organizations that that are willing to pay the higher marginal cost. In my area, if you opt for a small trash bin, you pay $10 a month (approximate) for the garbage service. But if you opt for a large (almost 2x the volume) garbage bin, you pay $12. That is not much a disincentive for people to throw away less. Instead if the city starts charging $30 for the large bin, people's behavior will change accordingly.

Anyway, thanks for bringing it up. Way to go BC!

Theresa said...

Hi CindyW - thanks for coming by!

I think shifting taxes away from income and onto carbon-intensive products/processes, and billing progressively are good ways to bring direct monetary consequences back into the things we all buy and do. Too often it is a better 'deal' to waste or over-consume something than it is to conserve it, and that is just not right!