Tuesday, October 30, 2018

Canada's new carbon tax. Seems like a good plan.

Condensed from this article adding some of my perspective.

A $20/ton carbon tax translates into a 16.6 cent per gallon surcharge on gasoline. So, in 2022, the $50/ton carbon tax will increase Canadian gasoline prices by about 42 cents per gallon (11 cents per liter). That would be about an 8% gasoline price increase by 2022.

I'll add that even the top figure of 42 cents per gallon is still less than the increased cost of gas that people experienced in 2008 when gas prices were up due to supply and demand; before significant increase of oil production (such as in North Dakota and Texas due to fracking) which led to low oil prices from the oil market glut.

This carbon tax will reimburse Canadian taxpayers in other tax savings.

The price of coal would more than double, with a carbon tax surcharge of about $100 per ton in 2022. Natural gas prices will rise by about 10 cents per cubic meter in 2022 compared to current prices of around 13 cents per cubic meter – about a 75% increase. This will increase demand for cheaper carbon-free electricity. However, Canada already supplies about 60% of its electricity through hydroelectric generation and 16% from nuclear – only about 20–25% comes from fossil fuels.

The carbon tax will top out in 2022 with no more tax increase unless future legislation changes that. It's a fairly modest tax, but they still think it will create a significant incentive toward cleaner energy.

Sounds like a very good plan tho there has been some struggle to get all the provinces on board. Compromises have been made. There could still be rebellion at the local level. We'll have to see how it all plays out.

While I still support Washington State's carbon tax, I think the Canadian version is better. Washington State's plan seems to try and hide the fact that it will cost fossil fuel consumers more. It goes after polluting industries, such as our oil refineries in Whatcom and Skagit Counties, who are now flooding our state with anti carbon tax campaign funding.

Canada's industrial sector will not be subjected to the carbon tax, but rather to an Output-Based Allocations system (similar to cap and trade).

The rebates to Canadian taxpayers are anticipated to exceed the increased energy costs for about 70% of Canadian households.