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Why BC's Carbon Tax Must Rise

Thinking about the climate when we debate climate policy.

By Matt Horne 25 Jul 2011 | TheTyee.ca

Matt Horne is director of the B.C. Energy Solutions program at Pembina Institute.

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Melting future: BC's beauty is shaped by climate, and time is running out.

If you're like me, debates about carbon taxes, cap-and-trade systems, carbon neutral requirements and other climate policies excite you. If you're like most people, you're probably more interested in the bigger picture -- the one that often gets lost in the policy details.

When it comes to climate policy, the bigger picture is whether or not we can avert a global warming crisis. For Canada and other developed countries, this means overhauling the way we produce and use energy as well as helping developing countries carve a clean path forward. Globally, we have a responsibility to reduce our reliance on fossil fuels and we don't have much time to do it.

Considering the urgency of this bigger climate backdrop, its disconnect from most climate policy debates is alarming. There are few examples, if any, where we are effectively grappling with the scale of the challenge that we're facing.

B.C.'s carbon tax provides an interesting example. Without question, implementing the tax was a hugely positive step for the province, one that has had international significance, given how challenging it's proven to be to put a price on carbon pollution.

The problem is, most debates about the future of B.C.'s carbon tax have tended to dodge the most important question: should the price continue to increase?

Raise the tax, spend it wisely

At $25 per tonne, the carbon tax currently generates about $1 billion in government revenue. By July 1, 2012, the tax is set to increase one more time to $30 per tonne, but the province doesn't have a plan after 2012. If the carbon tax is going to be a key part of B.C.'s energy revolution, then it needs to continue increasing -- fossil fuels are too cheap and plentiful to hope that change will just happen without an increase.

There are plenty of reasons why this post-2012 debate has been avoided; most notably because people are concerned about the impact of higher energy prices, and industry worries about how it will compete with jurisdictions that don't charge a carbon tax. These are important concerns; however, we're not going to resolve them by avoiding the discussion.

The revenue raised from the carbon tax could be an important piece of the puzzle as we look for that resolution. It could go towards public transit and other low-carbon transportation infrastructure so people and businesses have more options. We could use it to modernize industrial facilities in the province to make them more efficient and therefore more competitive than they are today. We could even upgrade affordable housing, so low-income households aren't trapped by higher energy prices.

Some of the smaller changes in the carbon tax that are being debated in B.C. may be helpful in building support for the harder, but necessary, conversations about continued increases. These include putting some revenue toward clean energy solutions instead of further tax cuts, increasing protection for low-income households so they aren't adversely impacted by the carbon tax, and closing loopholes so that the tax applies to all feasible sources of carbon pollution.

Time is running out

While what happens in the province is not going to define global success against climate change, its actions can be an important contributor to broader momentum. And as a recent poll commissioned by the Pembina Institute suggests, a strong majority (70 per cent) of British Columbians want the province to maintain leadership on climate policy. Finding ways to take next steps on the carbon tax would be one of the best ways of demonstrating that leadership.

In the next decade or two, we'll know if we've done enough to minimize the damage we're inflicting on the climate. Frankly, from the debates we're seeing across Canada, there's a long way to go get on that track. Failing to get on that track is going to leave a global mess for our children. That's not something I want my daughter to have to deal with.

If we get it right, we'll still be able to watch salmon in the Fraser River and look at the glaciers above Joffre Lake. If we don't, well, I'd rather not think about that scenario.  [Tyee]

Read more: Energy, Politics, Environment

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