Recommendations to weaken the B.C. carbon tax would be a step backwards

Blog - Nov. 17, 2011 - By Matt Horne

A Chevrolet Volt recharging at Surrey City Hall. Carbon tax revenue could to be used to support priorities such as electric vehicle infrastructure. Photo: Kevin Sauvé, the Pembina Institute.

Working on climate change issues can be challenging, especially when you compare what climate scientists say needs to be done with what politicians are (or are not) doing. Tuesday was a particularly challenging day.

That's when the British Columbia Select Standing Committee on Finance and Government Services released 75 recommendations for the 2012 B.C. budget. Included in the 75 were five recommendations about B.C.'s carbon tax and cap-and-trade rules that conveyed little interest in building on the positive steps already taken to address climate change in the province.

The most troubling recommendations were capping the carbon tax in July 2012, adding exemptions to its coverage and discontinuing efforts to help with the development of a regional cap-and-trade system.

Collectively, the recommendations ignore the warnings being delivered on an almost daily basis about the havoc climate change is going to wreak on our environment and our economic prosperity, which the Committee says it is trying to improve.

Take for instance last week's report from the International Energy Agency that basically says we have five years to turn things around if we want to have any chance of averting catastrophic climate change. Or a recent report from the National Round Table on Environment and the Economy that warns that Canada could lose up to 25 per cent of its gross domestic product (GDP) if we allow that worst-case scenario to come to fruition.

Ideally the Committee would have produced some forward-looking recommendations to further the province's climate change plan — recommendations that respond to the alarm bells we've been hearing for years and tap into the economic opportunity presented to B.C. in the form of clean energy.

What would more forward-looking recommendations look like? Here are a few ideas:

  • Instead of proposing to cap the carbon tax, why not propose to continue to increase it so it provides a stronger incentive to shift to clean energy? This would also create space for a conversation about the best ways to invest the revenue. That could include opportunities such as transit,  and district heating systems. Public polling we commissioned in April shows support for many of these types of spending priorities.
  • Instead of proposing to introduce new loopholes in the carbon tax's coverage, why not use a portion of carbon tax revenue to make targeted investments where there are legitimate concerns about competitiveness? Furthermore, why not propose closing the existing loopholes in the carbon tax's coverage that give an unwarranted free pass to upwards of 10 per cent of the province's greenhouse gas pollution? The same public polling strongly suggests that British Columbians would support these ideas.
  • Instead of proposing to stop cap-and-trade spending, why not continue engaging potential partners and increase our efforts to tell B.C.'s success story with the carbon tax? If we're serious about bringing more partners to the table the last thing we should be doing is disengaging.

Several reactions to the recommendations suggest there may be some opportunities to move to a more forward-looking conversation. B.C.'s Environment Minister distanced himself from the recommendations, pointing out that the province is moving at an appropriate pace on the carbon tax and cap-and-trade. And on the opposition side of the legislature, the NDP deputy chair of the Committee indicated discomfort with 20 per cent of the report's recommendations (although he did not say exactly which 20 per cent he disagreed with).

The next couple of months will be telling as B.C. sets the stage for its 2012 budget in February. The Committee's recommendations are not binding and it will ultimately be up to the Finance Minister to make the decisions. Here's hoping the Committees recommendations fall on deaf ears that are more interested in a forward-looking agenda. 


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