‘B.C.’s carbon tax is looking like a winner’

THE VICTORIA TIMES COLONIST – 29/07/2010

Amidst increasingly limited prospects for government action on climate change, this article highlights the unique success of British Columbia’s climate policy path since its introduction of North America’s first carbon tax shift. Though initially met by a host of concerns relating to business competitiveness and potentially adverse distributional impacts, a preliminary assessment of the tax two years’ on suggests it seems to be working. The tax puts a price on carbon emissions and then returns the revenues as tax cuts for individuals and businesses. Initial results indicate that B.C’s economic growth in 2009 – the first full year with the tax in effect – was higher than Canada’s national rate, and that unemployment rates are below the national average and did not increase following implementation of the tax. During 2008 and 2009, the tax raised $846 million. The value of the offsetting cuts was nearly $1.1 billion over these two years, such that the net tax reduction for tax payers was approximately $230. While the economic effects have been negligible, the environmental impacts are anticipated to be positive, but it is too early to determine the greenhouse gas reduction as yet, in part because Canada has not yet released carbon emissions data for 2009 and in part because the tax is still relatively low. There are however many examples illustrating that people have used less oil, gas and coal as the prices have risen. Read the article…

“We need a Carbon tax”

MONTREAL GAZETTE – 29/06/2010

Harvard Professor, Michael Porter, has called for a carbon tax in Canada, denoting the US cap-and-trade model as too complicated and arguing that it blunts incentives that would enhance innovation and competitiveness. He suggests that a carbon tax would, in contrast, be highly visible, transparent and fair and therefore much more likely to trigger innovation. He highlights that ‘even if you don’t believe in climate change, we do understand the fundamental importance of energy and energy costs… a carbon tax would lead to a rethinking of energy use, drive innovation in the green economy and yield profits for ‘first movers’’. Read the article…

‘Canadians like the things that produce pollution’

THE GLOBE AND MAIL – 12/01/2010

This article draws on the findings of an independent study into stimulus packages in various major countries, which show that the share of ‘green’ plans in Canada’s package is the second lowest of all countries studied. Conservative Prime Minister, Stephen Harper, prefers to treat the problem as an engineering, technological one, whereby subsidies and investments in projects will substantially bring down emissions. This article highlights that this approach contravenes the findings of many studies – including those by the Green Fiscal Commission – which show the most effective means for reducing emissions to be putting a price on carbon. Doing so in Canada, however, is not a popular option, as illustrated in the last national election. The article suggests that Canadians ‘like two cars, often large ones, and they like low gas prices. They like bigger and better television sets that use more electricity than smaller ones’. Read the article…

‘How a BC Carbon Tax rose from Dion’s ashes ‘

THE GLOBE AND MAIL – 18/05/09

This article highlights the very different levels of success of proposed carbon taxes in two Canadian elections held in the past seven months – one provincial and one federal. Whilst the carbon tax at the centre of Mr Dion’s federal campaign proved distinctly unsuccessful, Gordon Campbell saw much more success in his provincial campaign in British Columbia. Campbell listed a carbon tax as just one of many climate policies advanced by his government, under the ‘economic’ pillar in his platform.

Six lessons are drawn from these experiences: first, do not make a carbon tax (or any other complex policy instrument) the main issue in an election campaign; second, keep it simple; third, timing matters; fourth, communication skills are important; fifth, deeper pockets can turn the tide; and sixth, good policy alone is not enough. Read the article…

Commentary by Will McDowall: British Columbia’s carbon tax survives election contest

Voters in British Columbia’s provincial election provided a boost to carbon tax advocates yesterday, by re-electing the party that introduced North America’s first carbon tax last year. The election has been closely watched by the environmental policy community as a test case of voter support for carbon pricing and green tax reform.

The provincial result follows last year’s federal election in Canada, in which a party proposing a national carbon tax suffered spectacular defeat, receiving its lowest share of the popular vote since 1867. This electoral disaster was widely interpreted as a popular rejection of the carbon tax, despite endorsements for the carbon tax proposal from many of Canada’s leading economists. After the federal election, carbon taxes looked like electoral suicide in Canada, a view that the British Columbia election may overturn.

The BC carbon tax was introduced by the governing Liberal Party of British Columbia, under Premier Gordon Campbell. The tax was set initially at $10/tonne, climbing to $30/tonne by 2012, and applies to the majority of fossil fuels burned in the province. Revenues are recycled back as personal and corporate income tax cuts. Despite the government’s insistence that the tax is ‘revenue neutral’, there was significant opposition to the tax when it was introduced in July 2008 amid record high oil prices. Although the tax remains unpopular in rural communities, opposition appears to have subsided.

Indeed, in yesterday’s poll the carbon tax was not the electoral liability many had expected. Far from providing the opposition New Democrat Party with political ammunition to defeat the Liberals, campaigning against the carbon tax may have been the New Democrat’s downfall. The New Democrats, who have historically been seen as the greener of the two parties, ran an “axe the tax” campaign, describing the carbon tax as a ‘gas tax’ that would hurt the poor and let ‘big polluters off the hook’. The campaign was denounced by prominent environmentalists as populist electioneering, and many commentators have suggested that the ‘axe-the-tax’ rhetoric backfired, with green-minded voters turning to the Liberals or staying away from the polls.

Whether the electoral survival of North America’s first carbon tax will embolden other jurisdictions to implement similar policies remains to be seen. What is clear is that carbon taxes dodged a political bullet yesterday, and the prospects for carbon taxes across Canada look brighter today than they have for some time.

‘Canadians barely support carbon tax; don’t like B.C. carbon tax, poll finds’

THE CANADIAN PRESS – 10/05/09

The findings of a Harris Decima telephone poll, conducted between 29th April and 3rd May for The Canadian Press, indicate that 49% of respondents said they’d supported bringing in a carbon tax, but when asked if they’d support a carbon tax like that in British Columbia (which would incrementally increase the cost of gas and home heating oil), support dropped to 42%. It seems that in theory many people support the principle of a carbon tax and even its implementation broadly speaking, but then resent paying the price of the tax once implemented. Having observed the impact of the carbon tax in British Columbia, people harbour concerns that carbon taxes will not motivate the right kind of behaviour change; 60% of respondents in British Columbia said the tax hasn’t significantly reduced fossil fuel use in the province and almost as many said it has not motivated them to change their behaviour. The poll suggests that a poorly designed carbon tax could be damaging politically. Read the article…

‘No party fulfilling voter desire for green champion’

THE GLOBE AND MAIL – 27/04/09

This article highlights the unexpected level of voter interest in the environment in British Columbia’s election at a time when Canada is otherwise ‘gripped with concerns about the state of the economy’. More unexpected still is the Green Party’s focus, not on the environment, but on the economy. British Columbians do not want to see Liberal leader, Carole James, ‘axe’ the carbon tax (whether it is likely to have any measurable impact on global warming or not) and there appears to be a general feeling amongst voters that none of the parties have a coherent environmental policy. Read the article…

Achieving 2050: A Carbon Pricing Policy for Canada

The National Round Table on the Environment and the Economy has recently released a new report entitled Achieving 2050: A Carbon Pricing Policy for Canada. This report shows how Canada can achieve its environmental targets for GHG emission reductions at the least economic cost through a comprehensive cap-and-trade system and other policies that unify carbon prices and approaches across Canada. The carbon pricing policy proposed in Achieving 2050 aims to be responsible, reasonable, and realistic. It is responsible by integrating economic concerns with reaching our environmental goals throughout the design and implementation of the policy. It is reasonable by providing a suitable transition period to get the proposed new cap-and-trade system up and running across the country and enabling businesses and consumers to adjust. Finally, it is realistic by building on existing climate policy approaches – federally, provincially, and internationally – so we can make faster progress in reaching our goals.

The report is the product of over a year of intensive research and consultation by the NRTEE with leading national and international experts, environmental organizations, and industry associations. It argues that carbon pricing is a policy whose time has come; that now is the time to lay the groundwork for a truly effective long-term climate policy framework based on a unified carbon pricing policy at home, and internationally harmonized approaches abroad.

‘Gas tax set to make election footprint’

THE GLOBE AND MAIL – 10/04/09

This article highlights the change in Canadian attitudes towards a gas tax since last year’s election, when it looked like it was going to be a ‘wedge issue’. Two factors have likely driven the change; the fall in gas prices and increased demand for government action on global warming. Dr Norman Ruff, a retired political science professor at the University of Victoria, suggests that ‘what was behind the public anger at first was the high price of gas…the timing was all wrong for [Premier Gordon] Campbell initially because of what was happening at the pumps, but you don’t hear people complaining much about that now.’ Whilst Mr Campbell could now repackage the policy as a bold environmental move necessary to tackle the global challenge of our generation – global warming – this article suggests he must take care not to pitch that too hard as in the past year other governments have shied away from carbon taxes, instead pursuing cap-and-trade policies. Marc Lee, an economist with the Canadian Centre for Policy Alternatives, said that the Liberal’s main mistake was both the poor timing of the carbon tax proposal and their failure to sell it to the public; ‘they never really explained the revenue-neutrality part and they partly became victims by implementing this elegant package favoured by policy wonks that didn’t resonate with voters’. Read the article…

This article suggests that top environmentalists in British Columbia have ‘set their sights on punishing Carole James for her populist promise to scrap Gordon Campbell’s carbon tax on fossil fuels’.

‘Plan offers tax credit for home renovations’

GLOBE AND MAIL – 15/01/09

The Canadian Harper government has been floating the idea of a tax credit for home renovations, which could provide a significant stimulus for Canada’s residential construction industry. An important decision to be made should the Tories proceed with this idea is whether to offer a tax credit for home renovation in general, or merely for retrofits and upgrades that increase energy efficiency. The article highlights that a drawback of programmes offering subsidies for retrofitting and house refurbishment is that they are typically difficult to administer, hard to monitor and susceptible to fraud. Read the article…