The Solution
There are four clear opportunities to increase the carbon tax’s effectiveness and fairness in the 2012 budget:
1. Fix the loopholes so that it is applied equally to all emissions that can be accurately measured.
Currently, the carbon tax is not applied to industrial process emissions (e.g. methane vented from natural gas wells). Removing these loopholes would increase the carbon tax’s coverage from 73% percent of B.C.’s carbon pollution to 84%. Making this change would generate over $120 million in new revenue in 2012.
2. Continue increasing the carbon tax.
The carbon tax schedule currently extends to 2012, when it will be $30 per tonne. The 2012 budget needs to specify what the price will be in 2013, and it should stay the course with continued increases. Economic modelling shows that prices on carbon will need to reach $200 per tonne by 2020 for Canada to equitably contribute to a global effort to avert dangerous climate change.
3. Invest new carbon tax revenues in projects that reduce pollution and protect low-income families.
All of the carbon tax revenue is currently is used to lower other taxes and pay for low-income tax credits. New carbon tax revenues should be invested in projects like public transit that will reduce carbon pollution, and in programs and tax credits that protect low-income families from rising energy prices.
