With the BC provincial election approaching, I’m a bit surprised that we haven’t heard too much about the BC carbon tax lately. I do a quick news search every day or two on Google and I hardly see anything interesting about the BC carbon tax. Today I found Clark Williams-Derry (director of Sightline Institute) of Seattle, who wrote this commentary published on the current issue of Georgia Straight discussing that the hybrid system of carbon tax plus a cap and trade system is the best solution.
A hybrid system—a tax plus a cap—would provide some predictability about prices, as well as a firm guarantee that we’ll meet our climate goals. The tax keeps the system moving forward, continually improving our performance. And the cap is like a sturdy guardrail that keeps us on the road to success, making sure that we make steady, secure progress in creating a climate-friendly economy.
This makes sense and this hybrid system will exactly be the system that BC is going to have! The carbon tax will always be around, and the cap and trade system will come in to get the carbon that is not taxed, typically from process fuel from large emitters.
I’m excited about seeing how this hybrid system will work in BC, and i have no doubt that it will.
If you’re a carbon tax or a carbon cap and trade system supporter, are you in for a hybrid system?
I read this article last night, and this is the type of articles that makes me a bit…eh, annoyed.
“We oppose the carbon tax. We are convinced it doesn’t do a thing to reduce carbon emissions,” said David D. Hull, executive director of the Abbotsford Chamber of Commerce.
In the same article, he also praises the lowered business tax:
Small business got a giant helping hand from the province in October. After dropping the corporate tax rate on the first $400,000 of small business income to 3.5 per cent in July, Victoria slashed it again to 2.5 per cent, effective Dec. 1 …… ”We’re one of the best jurisdictions in North America for business tax, and we’re just getting better,” said Hull.
“We see those steps as a long-term positive for the province of British Columbia.”
Well… Mr. Hull, have you read the BC 2008 Budget? The small business corporate tax reduction is the result of the “revenue neutral carbon tax”!!!
Do you know of any other articles like this?? Please send them my way….
The combustion of any of the following fuel has Carbon Tax associated with it. Each fuel and its associated carbon tax for 2008 is outlined below:
- gasoline - 2.34 cents/L;
- diesel - 2.69 cents/L;
- natural gas - 49.66 cents/GJ;
- jet fuel - 2.61 cents/L;
- propane - 1.54 cents/L; and
- coal - HHV 20.77 $/tonne or LHV 17.77$/tonne.
Depending on the type of fuel, different amount of Greenhouse Gases (GHGs) is produced during combustion. In the “Climate Change Terminology”, different fuels have different emission factors (i.e. x gCO2e/L gasoline and y gCO2e/GJ Natural Gas). In Canada, Environment Canada determines emission factors and they are documented in the “National Inventory Report, Greenhouse Gas Sources and Sinks”. You may have noticed that the emission has the unit of “CO2e”, which stands for “CO2 equivalent”. This is because GHGs is more than just CO2, other GHGs (water vapor, methane, nitrous oxide, ozone, and CFCs) can also form during combustion of fuels. CO2e takes account of all GHGs.
Since we know that each tonne of CO2e will be taxed at $10 in 2008, we can determine the actual Tax that one needs to pay, which has been listed above.
OK, enough of boring definition, my point is that the Carbon Tax is not just the gas tax! In fact, as outlined in the BC Climate Action Plan (P.25-26):
- only 36%of GHG emissions in BC is from transportation (i.e. the combination of gasoline and diesel), AND
- only 39% of the transportation emission is from passenger vehicles!
This means that only 14% of the Carbon Tax is from the combination of gasoline and diesel!
In other words, 86% of the Carbon Tax is not from purchasing gas or diesel at the pump! Not bad in my opinion, what do you think?
Do you know that the BC Carbon Tax is a “revenue neutral” tax? What the heck does it mean anyway?
Simplily put, it means that all the money that individuals and businesses/industires pay on Carbon Tax is recycled back to all of us via tax reductions. The purpose of this type of incentive is to “shift tax” - charge more for bad tax (i.e. pollution/Greenhouse gas emission) and reduce good tax (i.e. income). The BC Government has actually prepared 10 case studies (Table 1.3 on P.17) to help us realize how we might all be benefited in every income category. While the information is somewhat available, it is not easy for find!!
You might ask, but someone or one of the sectors must pay more for Carbon Tax than received back from the government!
This is TRUE, because if everyone gets exactly the same they pay back from the goverment, then there is absolutely no use for this policy (and perhaps that’s why many think that revenue neutral is such a stupid idea?!). The breakdown, simpily put, is like this:
- ~64% of the Carbon Tax is paid back to individuals through tax credits (for lower income families) and tax reductions;
- 30% of the Carbon Tax is paid by the indivudials
64% for individual tax credits and income tax reductions is clearly outlined in the 2008 Budget (1,179M returned out of 1,849M total collected). From Environment Canada’s breakdown of BC’s GHG inventory in 2006 it stated at the bottom of the page that “British Columbians are directly responsible for about 30% of provincial GHG emissions, amounting to about 4.5 tonnes per person, per year.”
Well, not a bad deal as individuals in BC! Hopefully now the “revenue neutral” carbon tax makes a little bit more sense.
BC Carbon Tax | flo | 
March 20, 2009 5:00 am | 
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