British Columbia is jumping on the carbon tax bandwagon (along with pioneering Brits). As of this coming July, drivers in B.C. will incur a carbon tax charge of 2.4 cents per litre on all fossil fuels, including diesel (2.8 cents/litre) and natural gas (49.88 cents/gigajoule). Prices are planned to rise to 7.2 cents per litre by 2012.

The government estimates that it will collect $1.8 billion over the next three years, though Finance Minister Carole Taylor told the B.C. local news that all of the earnings will be funneled back to individuals and businesses.

From the B.C. Local News:

Taylor said legislation will be tabled this spring requiring the government to return every dollar collected by the carbon tax. As the carbon tax is phased in over four years, income tax on the first $70,000 of earnings is to be cut two per cent in 2008 and five per cent in 2009.

Lower income people will also receive a "climate action tax credit," amounting to $100 per year for each adult and $30 for each child. A single person earning $30,000 or less, or a couple earning $35,000 or less, will qualify for the full amount, to be paid quarterly with the GST tax credit starting in June.

Taylor said the tax cuts and credits will "give dollars to individuals to make their own lifestyle choices," and those who choose fuel efficiency will come out ahead. An average family with a minivan would pay $46 a year in carbon tax, which could be saved by driving 10 km less each week, or weatherstripping doors and windows to cut heat loss, she said.

Critics of the B.C. carbon tax claim it targets families, not major industries—who emit the most pollution.

NDP finance critic Bruce Ralston told the B.C. News:

"It's a great day for banks and big polluters," Ralston said. "They figured out in 13 months how to make ordinary people pay a carbon tax. There are a few one-time benefits, but the real beneficiaries here are the big banks."

To make the tax more palatable, the B.C. government is issuing a one-time only, no-strings "climate action dividend" of $100. The government is suggesting that residents use the money for a “green” purpose, though it’s relinquishing control over how the money is spent (could be on compact fluorescents or five litres of gas for their S.U.V.).

Beyond a doubt, B.C.’s imposition of a carbon tax is a brave and risky venture. Will a carbon tax create the chaos and upheaval that the colonial tea tax did? Environmentalists wonder if it will even make a dent.

Here’s Eco-Chick’s take:

It’s a good way to keep people aware and more accountable for their environmental degradation, while keeping the economy strong. The new tax will be implemented on July 1st. The tax will initially appear at the gas pumps where consumers will be paying approximately 2.4 cents per liter.

For Prius and Smart Car drivers you’re looking at only about $20 per yer - if that. But a Chevy Avalanche? Dodge Ram? An additional $70. The tax won’t only be appearing on gas, but on all fossil fuels.

Meanwhile B.C. has revamped its budget to support government spending on numerous climate change efforts, including $370 million for public transportation.

Via our friends at Eco-Chick.

Photo via flickr by duanestorey.

Comments (1)

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ChipSeal said:

I fully expect that the bureaucrats estimate of the amount of revenue generated by this tax will turn out to be optimistic. They will also discover the tax is to low to significantly change behavior. (High present fuel costs haven't done it, is it reasonable to expect 3 cents more per liter will be the tipping point?) What will they do then?

March 08, 2008

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