Published March 11, 2008
by iris_author
When British Columbia's finance minister Carole Taylor introduced the continent's first ever carbon tax in her provincial budget this February, her actions were greeted with almost unanimous praise in environmental circles. The news out of BC was particularly encouraging, as many felt that it would set off a chain of dominos that would see the rest of provinces and territories follow BC's lead.
The carbon tax has been a particularly tough nut to crack given the widespread antipathy towards introducing new taxes in general. With oil prices reaching record highs, any hike would be considered political suicide. However, with gas prices so high, a new levy could also be more palatable in much the same way that fair trade organic coffee has been successful due to consumers getting used to buying expensive coffee.
In perhaps a similar vein to China where the upcoming Olympics are sending various bureaucrats and administrators into massive overdrive to clean up the city, environmentalists may indeed have the Vancouver Winter Games to thank for this forward leap in thinking.
The flip side with the tax and why some have critiqued it is that it will be offset by tax breaks and credits elsewhere. As William Rees, the economist who invented 'eco-footprint' analysis notes in the alternative BC weekly Tyee:
In effect, neither business nor the average consumer will feel much financial bite from the tax and is free to spend his/her tax savings and credits on alternative forms of consumption. This amounts to "impact neutrality." (No wonder the Vancouver Board of Trade called it a "smart carbon tax" and gave the budget an 'A' grade.)
The problem is, that redirected consumption may have negative ecological impacts equivalent to those of any carbon emissions avoided. Keep in mind that climate change, while important, is only one of many symptoms of what has become rampant human ecological dysfunction.
- BC's Carbon Tax Shell Game (Tyee, February 28, 2008)
Another argument over the tax is that it may be regressive, amounting to a flat tax on gas consumption. As Tom Barrett notes in the Tyee:
Problem is, the rich are also the ones who can most easily afford to pay carbon taxes -- taxes like the ones in Tuesday's budget, which are intended to stop people from spewing out greenhouse gases.
-- How Fair Is BC's New Carbon Tax? (Tyee, February 20, 2008)
However, the Canadian Centre for Policy Alternatives thinks the budget has "done a reasonably good job of considering economic fairness." In fact, the progressive think tank contradicts Rees in that it praises the credits as making the tax more affordable for low income families.
Indeed, debate around the carbon tax gets very complicated very quickly, bringing into contention the universal need to reduce consumption vs. the need for a fair tax policy that cushions the blow on the poor. At the very least, British Columbia has brought the debate into the realm of actual government policy!
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