Discussion 3

Topic: AGREE OR DISAGREE: A national carbon tax is an inappropriate mechanism by which governments can meet NDCs.

Research

NDC: Recall NDC is Nationally Determined Contribution set at the Paris Agreement (COP 21). NDC is the amount of effort put in by a country to reduce its national emissions, and adapt to the impact of climate change.

Facts

• Fuel is inelastic as there is no replacements
• In 2016, the Canadian federal government instated a price on carbon: from $10/ton in 2008 to $50/ton by 2022. Provinces/territories are welcome to develop their own programs, but federal government will default a plan if none is given.¹
• In 2018, Greenhouse Gas Pollution Pricing Act was implemented.²
• 90% of carbon tax were eventually returned to tax-payers. Rebate will make up for the higher emission prices.²
• There is not enough emission data to tell, quantitatively that carbon tax is working.³
• Ontario emissions decreased between 2005 and 2017. The cap and trade system was introduced in Low-Carbon Economy Act in 2016. ⁴
• BC had carbon tax since 2008, but there is no significant difference in CO2 emissions between 2005 and 2017.³
• BC between 2007 and 2015: ⁵
  • Utilities (electric power generation, natural gas, water, sewage, and other systems) increased by 54%
• Overall BC economic growth remained stable.
• Carbon tax is more expensive for consumers (most of the time) since companies will offset their costs for pollution by charging higher prices for goods and services.
  • Incentivizes consumers to choose stuff other than fossil-fuel energy sources.
• Sweden has carbon tax since 1991, at a rate of 27€/ton and now is at 114€/ton. Result is 26% reduction in emissions with no obstruction to economic growth (78%) compared to BC’s 4-5%.⁶⁷
  • Difference is that Sweden has less landmass
  • The export of Sweden of vehicles and parts (10%) and fossil fuel (7%)⁸ is much less than Canada’s vehicle and parts (15+%) and fossil fuel (20%). A tax would affect Canadian economy more.⁹
• Most of Canada’s emissions come from fossil fuel (45%) and transportation (28%)¹⁰, although more can be improved in energy use and building emissions.
• Farmers in Saskatchewan are crippled by the carbon tax because now they have to pay more for equipment, supplies, and transportation, where the margins for making money is already thin.
• In 2010, Canada’s GHG emission is 20.3 ton per capita. That means, on average, one would pay an extra $1000 a year.

Opinion

• Carbon tax has a bad name: tax is negative connotation for income redistribution. To an extent, this is true due to uneven recycling tax money. :heavy_check_mark:
• For the public support of carbon tax, it is appropriate to use carbon tax and output-based pricing system (OBPS) from a very low rate, and taper up like Sweden did.
• Conservative is not entirely wrong. Carbon tax is only a small band-aid to the much larger wound in a way that it’s only applying. Conservative leaders say they want to focus more on process efficiency, and burning less fuel.
• I think that both caps and trade, and carbon tax are temporary solutions, and increasing it will not work, but at the expense of the people. People who work in the fossil fuel industry will suffer if the transition to clean energy is not seamless – which could lead to larger political divide and the comeback of conservatism in the political pendulum – which is already happening now with Jason Kenney, Andrew Sheer, and Rob Ford.
• A long term solution is more investment in clean energy. People are lazy; people like cheap stuff. If renewable alternatives are cheaper than heavy polluters, people will choose those. We should also invest in education, especially for adults who are in the dirty industry. Invest in public transit systems: from personal experience, cities in Alberta are virtually un-walkable, and public transit is crappy. Doesn’t matter if driving a car is expensive, it’s necessary and inelastic.
• On the similar note, burning fuel for heating is also needed for places everywhere except the coastal cities due to the extreme cold. Again, it’s necessary and inelastic. Putting a tax on top will just make people’s lives harder.
• People in the discussion are not talking about the rest of Canadians who don’t have access to nice weather, who don’t have nice public transportation systems, who don’t have walkable cities, who live with lower income. We should built green infrastructure, green buildings, the foundation of a sustainability city, before taxing people for just living their lives.
• Carbon tax raises prices of living without providing alternatives. Hence the controversy in Carbon tax, even in BC, approx. half the population oppose to carbon tax. People don’t want to pay more. Sure, on this discussion we would say we support higher carbon tax, but we don’t to pay for it.
• Does it work in the short term to make our numbers look good? yes. Does it make people more prosperous and happier, questionable.

Crazy idea:

• Take a poll: those who support the carbon tax will pay for the ones who don’t support carbon tax.

Verdict: it’s no a yes/no answer. While it might push us in meeting NDC, it takes a toll in every other aspect of Canadians, especially those who don’t live in year-round nice weather seasons like Vancouver.