On July 1, 2008 the BC government plans to institute a carbon tax of $10/tonne of GHG emissions on the sale of most fossil fuels in BC. This tax will increase by $5/tonne for each of the next four years until it reaches $30/tonne in 2012. The tax will be accompanied by a corresponding decrease in income taxes, such that the program will be revenue neutral for government.
The intent of the tax is to reduce consumption of fossil fuels by making them more expensive. No funds are actually allocated toward climate programs, let alone carbon offset projects so the fuel that is consumed will not be any more “climate friendly” or “carbon neutral” than before.
So… will people consume less fuel as a result of the carbon tax? Let’s do a quick calculation. It takes about 428 litres of gasoline to produce 1 tonne of CO2 equivalent GHG emissions. Gasoline prices in BC are around $1.17 per litre. So it costs a consumer about $500 to buy enough gasoline to produce 1 tonne of GHG. The BC carbon tax will increase that cost by $10 or 2% in the first year, increasing to $30 or 6% by 2012.
Does the BC government really believe that a 6% increase in fuel costs over 5 years is likely to cause anyone to reduce their fuel consumption?
I think not. One might expect a corresponding 6% decrease in fuel consumption, but more likely there will be no noticeable effect at all. Just look at the past 5 years. According to BCGasPrices.com, since 2003 gasoline prices in BC have increased around 70% (from about $0.70 per litre in 2003). That has had little noticeable effect on people’s fuel consumption, so what effect is an additional 6% increase over the next 5 years likely to have? I think none whatsoever.
Let’s do another calculation. There are carbon offset strategies (most notably methane capture from landfills, animal waste, or decaying plant matter) that offer proven, quantifiable GHG emission reductions for as little as $5/tonne (see www.carbonfund.org). At that rate the BC carbon tax of $30 per tonne would be enough to offset the GHG emissions from fossil fuel consumption 6 times over. According to a 2007 report, fossil fuels account for nearly 80% of BCâ€™s GHG emissions. Therefore, if the carbon tax were put towards effective carbon offset and emissions reduction projects instead of being paid back to us in the form of reduced income tax, it appears that BC would be able to decrease its GHG emissions by almost 500%. In other words, BC could become carbon NEGATIVE, practically overnight if the carbon tax were spent in a useful manner.
How Gordon Campbell could come so close to doing something so good and then miss the mark entirely is beyond my comprehension. What is also beyond my comprehension is the level of praise he’s receiving for it. Hasn’t anybody else run the numbers?
Originally posted at www.IWillTry.org.