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A Carbon Tax Backlash?

The political bet driving NDP's 'Axe the Gas Tax.'

By Tom Barrett 23 Jun 2008 | TheTyee.ca

Tom Barrett is a contributing editor to The Tyee with a focus on global warming policy and politics. You can reach him here.

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Sign of the times.

Environmentalists and economists say the carbon tax is good policy. But it's also starting to look like tricky politics.

A recent Ipsos Reid poll signals just how hard North America's first comprehensive carbon tax is going to be to sell.

The Opposition New Democratic Party has to be happy that almost 60 per cent of those surveyed don't like the tax, which comes into effect July 1.

On the other hand, the Liberal government has to be happy that their anger at the tax hasn't caused a shift to the NDP -- the Liberals still lead by 14 points.

On yet another hand (or possibly just switching back to the first hand), the NDP's Axe the Gas Tax campaign is just getting started.

The tricky part for the NDP is going to be making a case that they're credible anti-tax crusaders. That'll mean getting people to forget the "tax and spend" label that the mainstream media have pasted on the party.

For an opposition party, the gas tax makes a juicy target. The positive things associated with it -- reducing greenhouse gases to fight climate change, getting an income tax break -- are either abstract or distant.

The negative element -- paying more for gas -- is right in your face.

New taxes are always going to be unpopular, but raising the price of gas when the price at the pump is blasting its way towards $1.50 a litre shows either political courage or political cluelessness.

And there's just so many ways to attack it. It hasn't helped the government that they have done little to sell it, while using closure to ram it through the legislature.

Centerpiece of election strategy

The NDP is making the tax the centrepiece of a campaign strategy based on class and regional grievances. They are, they say, on the side of ordinary British Columbians against an unfair tax that lets "big polluters" off the hook.

You, the little guy, will get screwed while the fat cats rape the planet.

The theory behind the carbon tax is simple enough -- tax the sources of greenhouse gases so that it gradually costs more and more to pollute. People and companies will find ways to pollute less. They'll conserve fuel -- drive less, turn down the thermostat -- and adopt non-polluting technologies -- take the bus, say, or buy a hybrid car.

The elegant part of the theory is that the tax is revenue neutral -- you give back the money you collect by cutting income tax. That way nobody gets hurt.

The term "revenue neutral," however, has been a sticking point.

Northerners are convinced they are going to pay more, although the available data aren't conclusive.

From their point of view, the tax is unfair. And fairness is going to be a key point that the NDP will hammer in its campaign to axe the tax.

The NDP has also effectively exploited the confusion around exemptions to the tax. The NDP's Framework for Real Climate Action, released on June 13, says the carbon tax "lets big polluters off the hook by exempting 30 to 40 per cent of greenhouse gas emissions in B.C."

Someone who wasn't paying attention might get the impression that big corporations don't have to pay the carbon tax. They do, just like everybody else, when they burn fossil fuels.

Meet the 'big polluters'

The carbon tax covers emissions from almost all fossil fuels -- 70 per cent of B.C.'s total emissions, according to the government. Not covered are greenhouse gases from other sources. That includes gases that escape during coal mining and the production of oil and gas, as well as gases that are created during the production of things like cement and aluminum.

The government says these emissions are tricky to measure and tax. They may be taxed in the future or they could end up being regulated under a cap-and-trade scheme that is still being developed.

In 2005, the last year for which statistics are available, "fugitive" emissions from the coal, oil and gas industries amounted to 9 per cent of B.C.'s total greenhouse gases.

"Industrial processes," including cement and aluminum, made up five per cent of the total.

Non-fuel emissions from agriculture are also exempt. That's about 4 per cent per cent of total B.C. emissions.

Also exempt from the carbon tax: landfills, where ordinary British Columbians send their garbage (seven per cent of total emissions).

Passenger cars and trucks -- which are subject to the carbon tax -- make up about 14 per cent of total emissions.

We have met the big polluters and they are us.

Beating up 'Big Oil'

In addition to the fairness question, there's that disconnect between the payout and the payback. You may or may not notice the income tax cuts on your paycheque. You may or may not associate them with the carbon tax.

But you're sure as heck going to notice when the price of gas passes $1.50 a litre.

The NDP's given some extra oomph to this idea by associating the tax with Big Oil.

"As gas prices continue to climb, oil companies continue to rake in record profit while ordinary consumers take the hit in their pocketbooks," NDP leader Carole James said in a recent news release.

Another tricky rhetorical flourish has been to consistently refer to the carbon tax as a "gas tax."

It is, of course, much more than a gas tax -- it also applies to natural gas, propane, jet fuel, coal, peat and even shredded tires if you burn them as fuel.

But gas is where people are going to notice it. And it sounds so punitive. And, when it comes to making a label stick, it doesn't hurt that "gas tax" fits better in a headline than "carbon tax."

Besides, "gas tax" has a nice crackly sound, whereas "carbon tax" sounds kind of tired.

The Liberals will call it the carbon tax. The NDP will call it the gas tax. If enough voters call it that @#*&% gas tax, it could help swing the next election.

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