Day: July 1, 2009

BC and Carbon

As BC’s Carbon Tax enters the terrible twos, and is the subject of stupid headlines in the CBC trumpeting a 1.5c/L increase in gasoline price (smaller than the price difference between a pump in the Saanich Peninsula and outside), it is worthwhile to see what the rest of the province’s carbon strategy is, or isn’t doing.

Metro – B.C. looks to carbon capture to balance clean-air targets with energy revenues

Economic realities and environmental promises are creating an explosive mixture for the recession-fighting B.C. government as it juggles expansion in its oil and gas industry with the need to cut greenhouse gases.

Massive untapped gas fields in northeastern British Columbia hold billions in potential revenues, but environmentalists are watching to see if Premier Gordon Campbell will stick to his promise to fight global warming by cutting emissions by one-third by 2020.

This is one of the issues with relying solely on a carbon tax to reduce GHG emissions, it is inadequate. A carbon tax is a consumption tax levied at the point of sale, not at the point of production. The BC government has gotten a lot of positive press for the carbon tax, but it is reliant on natural gas and oil to bring in some revenue. After all, the lumber industry is dying with the US housing bust, and something needs to get the province out of deficit as the BC government will not countenance any tax increases whatsoever.

The weakness of the province’s carbon plan is best typified by quotes from a couple of fossil fuel executives/government officials:

“The question is, if I were to make this big investment, who’s going to pay me to do that so I can generate a return for my shareholders? Weilinger asks.

Horne agrees there is no business case for oil and gas companies to justify carbon capture projects to shareholders, but says industry needs to support greenhouse gas reductions.

The notion that industry will somehow support reductions is hilariously disingenuous. Carbon capture and storage is an untested and expensive technology even when it comes to sources where all the CO2 comes out of one tailpipe, like a power plant. The notion that it can be used in an activity as widespread and diffuse as oil/gas drilling is laughable. The best way for these companies can be forced to make their mining more GHG emission friendly is to price their actions according to their GHG production footprint, something a differently designed carbon price would do.

BC’s carbon tax, in my book, was a shrewdly designed political maneuver to undercut traditional environmentalist support for the opposition NDP, which very “smartly” took the bait and campaigned against it in a recent election earning howls of disgust from the mainstream environmental movement.

When it actually comes to cleaning up and taking actions that will actually reduce the province’s GHG footprint, the government is found wanting, as expected.