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Digging out of the Energy Hole

Carbon tax just part of whole new mindset.

By Ian Bruce 30 Jul 2008 | TheTyee.ca

Ian Bruce is a climate change specialist with the David Suzuki Foundation. For more information, visit www.davidsuzuki.org.

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The first step in getting out of a hole is to stop digging. But in the face of global warming and skyrocketing oil prices, some people just want to dig deeper.

U.S. President George Bush's response to record-high oil prices over the past few months was to lift a ban on oil and gas drilling in U.S. coastal waters that his dad, George Bush Sr., issued in 1990, and to call for drilling in the Arctic National Wildlife Refuge. And International Energy Agency chief economist Fatih Birol recently suggested that Canada should meet the challenge by expanding production in the Alberta tar sands and opening up the B.C. coast to oil and gas exploration.

Fortunately, the U.S. Congress, which imposed its own moratorium on offshore drilling in 1981, appears unwilling to heed President Bush's appeal to lift its ban. The November presidential election could up the stakes, though, as Republican candidate John McCain favours offshore drilling, while Democratic candidate Barack Obama opposes it.

Offshore exploration, drilling in wildlife preserves and expanding the polluting tar-sands will only get us further into a hole that is already so deep it's hard to see the light at the top. As writer George Monbiot noted in a recent article in the Guardian: "The price of oil is so high and it hurts so much because there has been no serious effort to reduce our dependency."

Economy and ecology

We aren't going to eliminate our dependence on fossil fuels overnight, but we must do everything we can to cut back; otherwise, we'll face the consequences of an increasing cost of living as oil prices spiral upward, as well as the disastrous consequences of rapid global warming. Scrambling to extract every possible drop of oil from the Earth as quickly as possible will only postpone the inevitable and intensify global warming.

The current energy crisis is a reminder that we can't choose between economy and ecology. We need a range of solutions to diversify our energy resources, develop alternative technologies and significantly reduce our reliance on dirty and increasingly scarce fossil fuels. The recent oil-price increases and the pain they have caused highlight how vulnerable our economy is to fluctuations in the world energy market.

A carbon tax is just one measure among many to help get us out of the hole. To start, a carbon tax sends a signal that the Earth's atmosphere is not a free dumping ground for polluters. A "polluter pays" principle takes into consideration all the costs of extraction and distribution -- and the costs of polluting the environment are very real.

Putting a price on carbon through measures such as carbon taxes and cap-and-trade programs, along with regulating fuel-efficiency standards and providing incentives for green technologies, will also spur innovation in energy alternatives, fuel efficiency, and environmentally sustainable products.

Steps towards a walkable world

We must also focus on better community planning and transit infrastructure to make it easier for people to walk, cycle and take transit to get around. Many of our cities are designed for automobiles, and although developing more fuel-efficient vehicles is an important step, reducing our overall need for cars and trucks is essential.

It's unfortunate -- and it's been a bit of a roadblock -- that so many people have looked at the energy crisis and the solutions to resolve it as a problem rather than an opportunity.

The carbon tax alone, in making it more expensive to use polluting technologies and cheaper to become greener, will give the economy a boost. If we really get serious about the challenge and start developing and implementing more sustainable ways to live, we will create an enormous range of economic opportunities and jobs.

Carbon tax money stays here

As for the argument that a carbon tax unfairly penalizes B.C. residents already reeling from massive gas-price increases, we must realize that oil prices will likely continue to rise by amounts many times greater than the increases due to an initially modest carbon tax. But with global market price increases, the extra dollars we pay for gas and diesel leave the local economy to end up in the coffers of foreign oil and gas companies. As the B.C. carbon tax increases, the money flows back to British Columbians through lower-income and some business taxes. Unlike the huge market price increases, the B.C. carbon tax returns more money to low-income households than it takes. (Protecting and improving the lives of the most vulnerable should be a priority as the carbon tax increases and evolves over time.)

People can use that money to reduce their energy consumption through actions such as switching to fuel-efficient vehicles and improving household energy efficiency with better insulation and other conservation measures.

Government must also play a more active role by investing in public transit, renewable energy, and home energy retrofits for rural communities and low-income households, as well as by reducing investment in automobile infrastructure. Although B.C.'s carbon tax is revenue-neutral, or in other words, a tax shift, we shouldn't rule out improvements such as returning a portion of revenue to local economies through investments in these green initiatives. These investments could also be funded through existing budget surpluses (B.C.'s budget surplus was $2.9 billion this past fiscal year), but funding built into the design of the carbon tax would be more stable.

Regulations such as those governing fuel efficiency are another cost-effective way to get us on track. For example, vehicle standards adopted by California can save a car owner much more in fuel costs over the life of the vehicle than the extra cost of the vehicle. These savings will pay back any increases in vehicle costs in about three years. The most important point is that money saved on fuel is money that isn't leaving the local economy.

No time for cynicism

It's easy to feel cynical about the challenge of confronting global warming when governments have taken so long to even recognize the magnitude of the problem, and some have yet to react. But cynicism only breeds paralysis -- the last thing we need to confront this problem.

Individual action is every bit as important as action from governments and industry. If nothing else, our personal efforts send the message that we care and that we're serious about this problem. We can all play a part in building the community bonds necessary to get governments to put into play the laws, regulations and investments required to solve this crisis.

We have some important choices to make. We can dig ourselves deeper into the fossil-fuel hole, and risk burying ourselves in the fallout from reliance on an increasingly scarce resource and corresponding massive price increases, as well as the serious consequences of global warming. Or we can stop digging and climb out. The latter would mean diversifying our energy sources and our economy so that our lives aren't governed by continually rising fuel prices, and it would mean learning to live in a sustainable way that will result not only in healthy economies but also in healthier humans and ecosystems.

Nobody likes taxes, but most people like what they provide. As the late U.S. Supreme Court Justice Oliver Wendell Holmes Jr. once said: "Taxes are the price we pay for a civilized society." The carbon tax, as one step out of the hole of fossil-fuel dependency, will help create a more civilized -- and sustainable -- society. We can also think of it as an investment in the future.

Now let's focus on taking the next step. We don't have time to lose!

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