British Columbia Introduces a Carbon Tax

Wow, I am already proud of my future destination, a carbon tax, no less. One that will start off at $10 per tonne of carbon (2.4c per litre of gasoline, or about 9c a gallon) and rise by a factor of three in a few years…

VICTORIA – Finance Minister Carole Taylor introduced an escalating carbon tax on most fossil fuels Tuesday, one she says recycles revenues back to taxpayers and businesses and is designed to ignite an environmental social movement in British Columbia and across Canada to fight climate change.And she’s handing every British Columbian $100 in June as seed money to get them thinking green.

The Canadian Press: BC introduces carbon tax, but off-sets increased fuel costs with tax cuts

The carbon tax advocacy center sets the required starter tax as 10c a gallon, BTW, so this measure by BC is no joke, it’s a serious effort to rein in CO2 emissions from the province. Carbon taxes are in general regressive as they are flat taxes, so the poor pay the same as the rich, but obviously will suffer more. So, what is the BC government doing to ensure that the poor don’t suffer?

The carbon tax revenue, estimated to hit $1.8 billion over three years, will be returned to taxpayers through personal income tax and business tax cuts, she said.The government will introduce legislation that requires it to table an annual plan that shows how the carbon tax revenue will be returned to taxpayers, Taylor said

Good words. But Taylor needs to realize that in the absence of well designed tax offsets, the people and businesses of BC will be at a temporary competitive disadvantage. It’s tricky to be an early adopter, but I am optimistic that BC will be the better for it.

Wonderful, now the rest of Canada (and the US) needs to follow suit. And, I look forward to blogging about Canada already, exciting!

Thanks of course to the grist for alerting me…

Update: An economist allays my regressivity and harm to business fears

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