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BC urged to raise carbon tax frozen in ’12 Tax started at C$10 per metric ton, frozen at C$30; climate leadership team recommends C$40 in 2018, climbing to C$360 by 2050 GARY PARK For Petroleum News
Since 2007 British Columbia has trumpeted its claims to being a world leader in curbing greenhouse gas emissions, largely through a gasoline and diesel fuel tax that has encouraged shifts in fossil-fuel consumption.
But its boasting has started to wear thin, especially when the government of Premier Christy Clark froze annual increments in 2012, ending a run that started at C$10 per metric ton and climbed to C$30, which translates into C$1-C$2 per barrel on oil.
Clark extended the freeze to 2018, insisting other provinces should introduce matching taxes before British Columbia resumed its progressive increases, setting off an outcry in some circles for the province to regain its role as a climate leader.
In its latest budget, the province said it expected to collect C$1.2 billion in the 2015-16 fiscal year from applications such as a C7 cents per liter tax on gasoline at the pumps, while issuing tax cuts and credits estimated at C$1.6 billion.
Climate team recommends raise However, a British Columbia climate leadership team - consisting of representatives from business, universities, First Nations and environmental organizations - issued a report on Nov. 27 containing 32 recommendations.
It called for an increase in the carbon tax to C$40 in 2018, C$50 in 2019 and C$60 in 2020, climbing to C$360 by 2050, with the goal of discouraging all but a small fraction of current emissions.
The team said there is no disguising the fact that the tax freeze will make it impossible for the province to achieve its goal of reducing greenhouse gas emissions by 33 percent below 2007 levels by 2020.
Team member Merran Smith said the 2020 target will be missed because “we stopped putting in place any new climate action. We’re really at a crossroads.”
2020 target ‘challenging’ Environment Minister Mary Polak said the government had always warned “that the 2020 target was going to be challenging to meet.”
She said a new public consultation process will be started in an effort to develop a new climate plan, due for release in the spring.
Polak disagreed with the team’s findings that British Columbia has stalled in recent years on the climate front.
Among the other recommendations, the team said the carbon tax should be broadened in 2021 to include the estimated 30 percent of carbon pollution generated through means other than combustion, such as emissions from pipelines, gas processing and industrial plant.
The report readily acknowledged that its suggested tax could impose an onerous burden on some industries and drive others out of business.
At the same time, it said government policies should “avoid an outcome where economic activity shifts from B.C.to other jurisdiction because of B.C.’s carbon tax.”
Revenue neutral Jock Finlayson, executive vice president of the Business Council of British Columbia, said the tax’s overall impact - mostly because of the government’s decision to make it revenue neutral - has caused neither significant harm nor benefit, other than a negative effect on sectors such as natural resources and manufacturing.
University of Calgary economist Jennifer Winter said the results so far from the British Columbia tax have shown “that it’s not the end of the world to have a broad-based carbon tax. It has not been detrimental to industry in B.C. ... it is possible to have an environmental policy that doesn’t destroy the economy.”
What isn’t clear is whether a renewed drive to reduce emissions would deal a blow to the planned LNG sector.
Panel member Tzeporah Berman, a long-time environmentalist, said she is skeptical that LNG “is a smart economic path for the province at all.”
Even so, she said the team model left some room for LNG development, provided it was combined with stringent measures to minimize emissions.
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