(Since opposition to emissions trading is heating up as fast as the
European market is crashing, even while Obama renewed his
traditional neoliberal support for cap-and-trade last week, is the
logical alternative a 'tax-and-dividend' approach such as offered by
Senators Sanders and Boxer? Maybe - depends upon the design, and
most have adverse effects on income fairness given the high-carbon
lock-in poorer people face living so far from employment in sprawl
cities - but just as importantly, the small-scale incremental
shifts won in the process are not going to be nearly sufficient
to make the huge post-carbon transition needed in all our
systems of energy, transport, agriculture, extraction,
production, consumption, disposal and financing. The
longest experiment has been in British Colombia, and there are
certainly yuppie-green advocates of a carbon tax who think it's
going well, e.g.
http://daily.sightline.org/2013/01/30/three-things-everyone-should-know-about-bcs-carbon-tax-in-pictures/
and
http://daily.sightline.org/2012/11/05/deciphering-the-impacts-of-bcs-carbon-tax/
... but it's not going well, says Ian Angus: “the B.C. carbon tax is
regressive, shifting ever more of the province’s tax burden onto
working people, while reducing taxes on corporations. It will do
nothing to cut emissions or slow global warming.”)
B.C.’s carbon tax is a failure
… and Australia is following suit
by Ian Angus
Posted on July 3, 2012
I know it’s not nice to say “I told you so,” but four years ago
an editorial I wrote for for Canadian Dimension magazine about
British Columbia’s then-new carbon tax said this:
“the B.C. carbon tax is regressive, shifting ever more of the
province’s tax burden onto working people, while reducing taxes
on corporations. It will do nothing to cut emissions or slow
global warming.”
At that time, the carbon tax was being hailed as a huge step
forward. Greenpeace, the Pembina Institute and other greenish NGOs
teamed up to give the province’s premier an “Acts of Climate
Leadership” award for imposing the tax.
How has it worked out in practice? Today Bill Tilleman gives us
the bottom line in The Tyee:
British Columbia’s unique carbon tax on gasoline and other
fuels went up another 1.1 cents a litre Sunday, but it remains
an expensive, ineffective and unpopular failure.
While the BC Liberal government is attempting to make the
proverbial silk purse from a sow’s ear, the reality is that
North America’s only carbon tax is not reducing vehicle fuel
consumption.
Nor is it helping improve the environment, since every cent of
the $1.17 billion in tax revenue raised this year goes to
corporate and personal tax cuts — not to fund a single
environmentally-friendly program like public transit, energy
efficiency or conservation.
Statistics Canada figures show what happened. In 2008 — the
carbon tax’s first year — B.C. motor gasoline sales were 4,529.8
in thousands of cubic metres. In 2011 they totaled 4,536.8
thousand cubic metres.
Gas sales went up, not down, under the carbon tax, despite a
tough economic recession that reduced consumption.
***
http://thetyee.ca/Opinion/2012/07/03/Carbon-Tax-Empty-Promise/
Carbon Tax: Empty Promise for Enviros
Fuel sales still status-quo while
emissions-heavy industry booms under BC Liberals.
By Bill
Tieleman, 3 Jul 2012, TheTyee.ca
"Yet for all its environmental piety, Norway
is also a prodigious polluter. Its greenhouse-gas emissions
have grown 15 per cent since it adopted the carbon tax."
-- The Economist, Jan. 2009
British Columbia's unique carbon tax on gasoline and other
fuels went up another 1.1 cents a litre Sunday, but it remains
an expensive, ineffective and unpopular failure.
While the BC Liberal government is attempting to make the
proverbial silk purse from a sow's ear, the reality is that
North America's only carbon tax is not reducing vehicle fuel
consumption.
Nor is it helping improve the environment, since every cent
of the $1.17 billion in tax revenue raised this year goes to corporate and
personal tax cuts -- not to fund a single
environmentally-friendly program like public transit, energy
efficiency or conservation.
Statistics Canada figures show what happened. In 2008 -- the
carbon tax's first year -- B.C. motor gasoline sales were 4,529.8 in
thousands of cubic metres.
In 2011 they totaled 4,536.8 thousand cubic metres.
Gas sales went up, not
down, under the carbon tax, despite a tough economic
recession that reduced consumption.
Hardly environmental
Nonetheless, B.C. Environment Minister Terry Lake claims
success, arguing that greenhouse gas emissions have dropped
4.5 per cent between 2007 and 2010.
But even Lake doesn't deny that two-thirds of the GHG drop
was "likely attributable" to the economic
downturn, not the impact of the carbon tax.
B.C.'s stated goal is a 33 per cent GHG reduction by 2020 --
and Lake admits that will be "challenging" to meet.
Mark Jaccard, a Simon Fraser University environmental
economics professor who strongly supports the carbon tax, says
it will take 20 years to determine if it works.
"It would be shocking if a carbon tax had made a difference
in a couple of years and it hasn't," Jaccard says.
It would also be shocking if the BC Liberals admitted their
own hypocrisy and either fixed or scrapped the carbon tax,
which remains highly controversial.
While paying lip service to environmental concerns, this
government's biggest single capital expenditure is building a
new $3.3 billion, 10-lane Port Mann Bridge that will
dramatically increase vehicle traffic -- while scrapping the
old bridge despite an estimated
remaining lifespan of up to 50 years, according to an
engineer who designed and supervised its construction.
(Award-winning Dutch engineer Gerrit Hardenberg told the
Journal of Commerce this year that the existing Port Mann
Bridge should have been twinned, at a cost for the second
bridge of less than $200 million.)
And the government claims it wants to reduce GHG emissions,
but last month declared fossil fuel natural gas which it
previously condemned as "dirty" is now "clean" -- in order to
power up to six multi-billion dollar liquefied natural gas
plants for exports to Asia.
B.C.'s greenhouse gas emissions in 2009 were 66.9 million
tons. Fugitive emissions from LNG extraction alone will produce 54 to 110 MTs a year, according
to the B.C. Sustainable Energy Association.
Putting every British Columbia driver into a Smart Car or
Prius or tripling the carbon tax wouldn't make up for all the GHGs those LNG bad boys will be
responsible for, between extraction, liquefaction, export and
consumption.
Wan support
What's more, a poll released
by the pro-carbon tax Pembina Institute in 2011 found that 51
per cent of British Columbians did not want the carbon tax to
continue increasing each year, while just 29 per cent did,
with 21 per cent not sure.
That may be a reflection of how unfair the regressive carbon
tax is, since those with lower income pay proportionally more
of their budget on gas and fuel than upper income earners.
And northern B.C. residents who don't have access to public
transit have no choice but to pay higher gas and fuel prices
to get around and to stay warm.
There's also the Norway example, where despite
introducing a substantial carbon tax in 1991, GHG emissions
had jumped 15 per cent by 2008.
"Norwegians, who already pay nearly $10 a gallon, took the
tax in stride, buying more cars and driving them more," the
Wall Street Journal reported. In B.C. terms, using current
regular gas prices of about $1.35 a litre in Vancouver, the
Norwegian price today is about $2.65 a litre, with six per
cent of that its carbon tax component.
Whether you want to scrap the carbon tax, keep increasing it
or fix it will be the subject of a B.C. government review, where you can
let Finance Minister Kevin Falcon know how you feel until Aug.
31.
So don't count on this government making the carbon tax
disappear or using the revenue for anything that would
actually help reduce fuel consumption anytime soon. ![[Tyee]](pngNE9GjJNO7G.png)
Bill Tieleman is a regular Tyee contributor who writes a
column on B.C. politics every Tuesday in 24 Hours newspaper.
E-mail him at [email protected]
or visit his blog.
***
B.C.’s Carbon Tax: A Regressive
Hoax
H.L. Mencken once wrote, “For every complex problem there is an
answer that is clear, simple, and wrong.”
British Columbia’s recently announced carbon tax is a case in
point. It won’t reduce greenhouse-gas emissions and it will have
no impact on global warming — but it will hurt working people and
the poor.
According to carbon-tax advocates, greenhouse gases are growing
because emissions are free: corporations and consumers don’t pay
when they use the atmosphere as a carbon waste dump. By imposing a
price on products that produce CO2 and related gases, a carbon tax
will cause consumers and corporations to adopt low-emission
products or technology. Presto! Free-market magic works again!
Even the most committed defenders of carbon taxes agree that this
kind of tax will only work if two conditions are met: The tax must
be high enough to cause buyers to switch to alternatives, and
there must be alternatives available at prices buyers can afford.
Neither is true for the B.C. plan.
The budget proposes a tax of $10 per tonne of emissions this
year, rising to $30 per tonne in 2012. For gasoline, this works
out to 2.4 cents per litre this year, rising to 7.2 cents per
litre in four years.
By way of comparison, the average retail price of gas in Canada,
adjusted for inflation, has risen forty per cent in the past five
years. The increase is the equivalent of $120 per tonne of
emissions — four times as much as the maximum tax proposed in B.C.
But consumption did not decline. In fact, during the same period
both gasoline sales and greenhouse-gas emissions rose to record
levels.
In effect, we’ve already tried a much tougher carbon tax than
B.C. is proposing — and it didn’t work. Corporations passed the
cost onto customers, and wealthy consumers absorbed higher prices
easily. Working people and the poor tightened their belts,
spending less on other things.
Why has the demand for petroleum products been so inelastic, so
unaffected by price increases? Because, contrary to the
carbon-taxers’ wishful thinking, the much-vaunted free market did
not deliver alternatives. Despite oil prices that have risen
farther and faster than any tax advocate proposes, the market has
not given us clean energy, or low-emission cars, or cost-effective
carbon-capture technology, or universally accessible mass transit,
or energy-efficient homes and offices. Cities continue to be
designed around roads and single-passenger vehicles.
The main thing that the market has produced in response to rising
oil prices is the Tar Sands. Rather than investing in clean
energy, corporations are putting billions into the biggest,
dirtiest industrial project in the world.
Could the B.C. government use carbon-tax revenues to expand
public transit and other alternatives? Perhaps — but what it is
actually doing, as recommended by carbon-tax advocates, is cutting
other taxes so that the carbon tax will be “revenue neutral.”
Businesses will do particularly well: not only are their taxes
being cut, there are no restrictions on their ability to pass the
taxes on to customers.
As a nod to social justice, the plan promises “Climate Action
Credits” to offset the carbon taxes paid by low-income people.
However, as the National Union of Public and General Employees
points out, credit payments will not keep up with annual tax
increases; by 2012 low-income people will pay twice as much in
carbon taxes as they receive in credits.
In short, the B.C. carbon tax is regressive, shifting ever more
of the province’s tax burden onto working people, while reducing
taxes on corporations. It will do nothing to cut emissions or slow
global warming.
The liberal environmentalists who have endorsed this scheme
should hang their heads in shame.
***
BC’s Carbon Tax Gets Even More
Regressive
When it was implemented the BC government claimed its carbon
tax wouldn’t hurt the poor. We disagreed – and we were right.
by Ian Angus
Last December, to their eternal discredit, ten Canadian
environmental groups gave an “Acts of Climate Leadership” award to
British Columbia premier Gordon Campbell, for his government’s
introduction of a carbon tax.
As an article posted on Climate and Capitalism
earlier commented, the BC tax was a regressive hoax, a crude
case of greenwashing.
“the B.C. carbon tax is regressive, shifting ever more of the
province’s tax burden onto working people, while reducing taxes
on corporations. It will do nothing to cut emissions or slow
global warming. The liberal environmentalists who have endorsed
this scheme should hang their heads in shame.”
Were we right? Here’s what noted economist Marc Lee writes in the
Progressive Economics Forum, marking the
second anniversary of the implementation of the BC carbon tax:
When it was introduced back in 2008, the carbon tax dedicated
about one-third of revenues to a low-income credit (the
remainder going to personal and corporate income tax cuts). This
was a big positive with households in the bottom 40% of the
distribution slightly better off on average, with credits
exceeding taxes paid.
Alas, last year’s increase to $15 a tonne wiped out that gain
because the low income credit barely increase in value (from
$100 per adult to $105), while the carbon tax grew by 50%.
The new 2010 increment to the carbon tax will make the whole
regime regressive – meaning a bigger hit to low-income families
relative to their income; they will be absolutely worse off even
after considering the credits. For the bottom 40%, the numbers
are not huge – about a $30 per year loss, but pile that on top
of the HST and you get the picture. That said, it could have
been worse: the2010 budget increased the credit another ten
bucks to $115.50 per adult.
One might argue that the whole point is to get all households
to change their behaviour in response to the carbon tax. But it
is the lowest income families that have the hardest time making
the capital investments needed to get ahead of the curve, and
who are most locked into carbon necessities (like heat) that are
difficult to reduce easily. High income families have a much
easier time reducing their consumption and upgrading their homes
for energy efficiency.
Like the HST, the carbon tax brings a windfall to business,
with a large chunk of this year’s revenue going to corporate
income tax cuts. Back in 2008, the projected recycling to
business tax cuts in 2010/11 was estimated at $333 million. In
the 2010/11 budget that amount has been souped up to $412
million – more than half of the anticipated $796 million in
carbon tax revenues – to add onto savings coming from the HST.
Since all taxes are ultimately attributable to households,
corporate tax cuts are essentially upper income tax cuts. On
this basis, the top 20% of households (who own the vast majority
of shares in businesses) are actually huge beneficiaries of the
carbon tax regime.
Lee defends carbon taxes as “an important policy tool in battle
against global warming,” but argues that they should be structured
to hit the richest, not the poorest, and that half the revenue
should be used for “major improvements in public transit, energy
efficiency retrofits, and green jobs training programs.”
We don’t disagree in principle. Carbon taxes can be a useful
tool, IF they are combined with concrete action
to phase out fossil fuels rapidly and provide alternatives.
Unfortunately, pro-business governments (ie, all governments in
Canada) aren’t going to do that.
