Strong National Support for British Columbia’s Carbon Tax

A recent survey by the Pembina Institute found that 72% of Canadians support BC’s carbon tax, an idea that has been getting a fair bit of discussion recently in the blogosphere (I hate that word).

It seems like there’s a growing consensus (Jack Layton and Stephen Harper (!?) aside) that a carbon tax, rather than a cap and trade system, may be the way to go. While there has been a fair bit of news lately about the rather significant amount of money that is circulating on carbon trading markets (in the 50s and 60s billion USD), it also seems to be the case that that flurry of economic activity is mostly just smoke and mirrors, and that, e.g., the caps for the European system were not set appropriately so that little actual reduction in carbon output is occurring.

The complexities associated with a working cap and trade system are legion, which is one of the reasons why people are looking to a carbon tax, which is much simpler to implement. But the tax that BC is proposing is small and not significant enough to result in any real consumer behaviour change. Moreover, there are legitimate concerns that the tax will be regressive, putting the greatest economic pressure on people in lower income brackets, and also its “revenue neutrality” (which seems like a great idea for getting people to accept it) will, in the end, make it difficult for any of the tax monies to be spent on investment in cleaner/renewable energy technologies.

So we’re left with one system that seems to unwieldy to implement vs. another that doesn’t seem to carry much promise of actually reducing carbon output, at least in its current form. That said, I still side with the carbon tax. While making it revenue neutral to start may not be a bad idea, it needs to get ramped up very quickly for it to have any effect, and also to have provisions that ensure that low-income Canadians are not left in the lurch.

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