By Robert A. Vella
Consumers don’t like to hear this because it means higher gas prices, but taxing carbon is one of the most effective climate change mitigation tools available considering the gross limitations of our current economic and political systems. Here’s an update on such efforts along the North American west coast.
From Washington Monthly – A Model Carbon Tax:
This fall, voters in Washington State could become the first in the country to pass a carbon tax. If approved, Initiative 732 (I-732) would levy a $25 per ton tax on carbon emissions from fossil fuel, which would in turn fund a one percent cut in sales taxes as well as rebates for lower-income households.
BC’s [Canadian province of British Columbia] carbon tax started at C$10 per metric ton, and has been $C30 per metric ton (about $23 in U.S. money) since 2012. In real-world impacts, the effect of this tax has been to raise the price of gasoline by 6.67 Canadian cents per liter (roughly 25 U.S. cents per gallon). [clarification by The Secular Jurist]
The tax has had undeniably significant effects on the province’s consumption of fossil fuels and, as a consequence, its carbon emissions. Stewart Elgie, a law and economics professor at the University of Ottawa, calculates that petroleum use per capita fell more than 16% in BC in the first five years of the carbon tax, while it rose 3% in the rest of Canada during the same period. “To put that accomplishment in perspective,” Elgie writes, “Canada’s Tokyo target [in global climate change accords] was a 6 percent reduction in 20 years.”
BC’s carbon tax appears to be an economic home run as well. BC’s tax is required to be revenue-neutral, which means that carbon tax revenues must be used to offset other taxes. Consequently, BC’s corporate tax rate is currently the lowest of any Canadian province. The revenue also finances BC’s Low Income Climate Action Tax Credit, which gives quarterly payments to households earning less than C$38,193 (about $29,000 U.S.) to help offset the tax’s regressivity. (As with any consumption or sales tax, the burden tends to fall more heavily on lower-income households, who spend a larger share of their income on consumption.) This year, a family of four gets payments totaling C$1,200 (about $900 U.S.) over the course of the year.
Furthermore, the carbon tax has not hurt BC’s overall economy. For the last eight years, unemployment in BC has been consistently lower than the Canadian average. And the Conference Board of Canada, a non-profit research organization, expects BC’s economy to grow by 3% in each of the next two years – twice as fast as Canada as a whole. These factors, combined with the province’s reduced levels of petroleum use and carbon emissions, indicate that a carbon tax can indeed help the environment without hindering the economy.
In fact, many in the BC business community want to raise the carbon tax still further.
From the Los Angeles Times – With climate legislation stalling, Jerry Brown looks to potential fight at the ballot box:
The battle to extend California’s climate policies could grind to a halt this year, but Gov. Jerry Brown plans to continue pressing the issue before his final term in office ends — even if that requires a ballot measure campaign in 2018.
The commitment from Brown, detailed in a statement from his top aide, Nancy McFadden, came after a flurry of activity in the Capitol on Thursday that revealed the narrow chances of passing climate measures before the end of the legislative session on Aug. 31.
Environmental advocates and some lawmakers have wanted new laws this month to extend the state’s targets for reducing greenhouse gas emissions and to safeguard the cap-and-trade program, which limits how much greenhouse gas can be emitted into the atmosphere and requires companies to obtain permits to pollute. The system has faced legal and political headwinds.
Powerful oil companies have lined up in opposition to the legislation, and it’s unclear whether any measure would pass muster with business-friendly Democrats in the Assembly.