{"id":1095,"date":"2009-04-30T05:54:13","date_gmt":"2009-04-30T10:54:13","guid":{"rendered":"http:\/\/thesocietypages.org\/thickculture\/?p=1095"},"modified":"2009-06-17T06:24:22","modified_gmt":"2009-06-17T11:24:22","slug":"the-2009-bc-deflection-the-bc-liberal-carbon-tax-under-ndp-fire","status":"publish","type":"post","link":"https:\/\/thesocietypages.org\/thickculture\/2009\/04\/30\/the-2009-bc-deflection-the-bc-liberal-carbon-tax-under-ndp-fire\/","title":{"rendered":"The 2009 BC Deflection:: The BC Liberal Carbon Tax Under NDP Fire"},"content":{"rendered":"


\n\"carbon-tax1\"<\/a><\/p>\n

Notes from north of 49\u00baN<\/em><\/p>\n

While the Vancouver Canucks advance in their bid for the Stanley Cup<\/a><\/strong>, the British Columbia provincial election is heating up, as the NDP has pulled within 2 points<\/a><\/strong> (39\/41 +\/- 3.4) of the not-so-liberal BC Liberal Party. \u00a0The Green Party is running a distant third at 13%.<\/p>\n

One of the big election issues is the Carbon Tax, which is a tax on pollution. \u00a0It puts a price on the social costs of environmental degradation {negative externalities}. \u00a0The carbon tax was initiated last year in BC, which should give Obama insights into his plans to address carbon reduction. \u00a0{Obama’s already talking<\/a><\/strong> of a nationwide “cap and trade<\/a><\/strong>” policy.}<\/p>\n

BC Carbon Tax & The Economic Sociology of the Environment<\/strong><\/p>\n

The BC carbon tax claims to be revenue neutral, meaning it returns the tax in the form of lower personal and corporate income tax. \u00a0The tax shuffles funds around in the following manner where one-third of the carbon tax revenues are paid by individuals and two-thirds by industry, while two-thirds of the tax reductions benefit individuals and one-third benefit business. \u00a0A fairness issue arises, as some businesses can pass the tax along to consumers, depending on the elasticity of demand. \u00a0The\u00a0carbon tax is initially (effective 7\/1\/08) $10 per tonne of carbon dioxide equivalent (CO2e) emissions (2.41\u00a2 per litre on gasoline), but will increase each year after until 2012 to a final price of $30 per tonne (7.2\u00a2\u00a0per litre). \u00a0For US readers, this is currently 7.68\u00a2 US per gallon of gasoline and will go up to 22.9\u00a2 in 2012 (4\/30\/2009 exchange rate).<\/p>\n

One of the issues brought up is that while the BC Liberal Party is imposing a tax on pollution, it’s allowing the export of carbon-producing fuels to leave the province untaxed. \u00a0In addition, the government is allowing offshore drilling for oil as part of their energy policy. \u00a0This is opening up the BC Liberals to charges of hypocrisy.<\/p>\n

So, in the past 10 months, what has been the effect? \u00a0I think it’s impossible to gauge the results, given that gasoline prices have gone down and the BC economy is in a recession, although with lower unemployment than Washington, Oregon, and California. \u00a0I have to admit I am skeptical that the BC Liberal’s \u00a0carbon tax policy will actually reduce carbon emissions. \u00a0Why? \u00a0This Canadian Dimension<\/em> editorial introduces a paradox::<\/p>\n

“By way of comparison, the average retail price of gas in Canada, adjusted for inflation, has risen forty percent in the past five years. The increase is the equivalent of $120 per tonne of emissions \u2014 four times as much as the maximum tax proposed in B.C.<\/p>\n

But consumption did not decline. In fact, during the same period both gasoline sales and greenhouse-gas emissions rose to record levels…<\/p>\n

In short, the B.C. carbon tax is regressive, shifting ever more of the province\u2019s tax burden onto working people, while reducing taxes on corporations. It will do nothing to cut emissions or slow global warming.”–“B.C.\u2019s Carbon Tax: A Regressive Hoax” from Canadian Dimension<\/a> <\/strong>(4\/30\/2008)<\/p><\/blockquote>\n

How can this be? \u00a0Are the economists that off-base?<\/p>\n

As an economic sociologist, with a BA in the dismal science<\/a><\/strong>, I know at least some of the answers. \u00a0Increasing prices through a Pigouvian tax<\/a> <\/strong> without consumption\/production alternatives offers no incentives to alter behaviour away from carbon emitting activities.<\/p>\n

A Northwestern sociologist, Monica Prasad, offered this interesting observation::<\/p>\n

“The one country in which carbon taxes have led to a large decrease in emissions is Denmark, whose per capita carbon dioxide emissions were nearly 15 percent lower in 2005 than in 1990. And Denmark accomplished this while posting a remarkably strong economic record and without relying on nuclear power.”<\/p>\n

—“On Carbon, Tax and Don\u2019t Spend,” NYT<\/em><\/a><\/strong> (3\/25\/08)<\/p><\/blockquote>\n

How did Denmark do it? \u00a0According to Prasad, Danish policymakers\u00a0subsidized environmental innovation by businesses and investing heavily in alternatives. \u00a0The idea here is to give incentives to move consumers and businesses away from carbon emission generating technologies towards renewable ones. \u00a0As a sociologist, I’m wary of talk of “pricing” carbon, as it attempts to reduce natural capital (i.e.<\/em>, the environment) with financial capital and the assignment of property rights, politicizing economic activity along the lines of power and wealth. \u00a0I’d much rather see policy aimed at moving towards a different technological curve, away from carbon, along with an increase in investments in public infrastructure (e.g.<\/em>, mass transit in cities\/suburbs) that offers alternatives to carbon-heavy practices.<\/p>\n

The Politics of Carbon: “Axe the Tax”<\/strong><\/p>\n

Carole James, leader of the NDP, has been advocating dumping the carbon tax in favour of a “cap and trade” approach, the direction Obama is leaning towards. \u00a0The NDP “axe the tax” stance<\/a><\/strong> was costing them politically<\/a><\/strong>, despite the tax being unpopular, as environmental groups criticized the move. \u00a0In this election, there are 85 seats up for grabs. \u00a0While the Green Party may siphon off votes from the NDP, it is very unlikely that a single seat will go to the Greens. \u00a0Given the overall BC Liberal Party stance on the environment, environmentalists may have a tough choice on May 12. \u00a0The carbon tax may fade away as a key issue, as the economy and issues of ethics and integrity<\/a><\/strong> might come front and center, but perhaps the economy and the environment will become an intertwined issue.<\/p>\n

I’d like to see policies in BC and elsewhere move towards weaning citizens away from carbon. \u00a0A recent Wired Magazine<\/a><\/strong> article \u00a0goes over many of the issues involved in green technologies, including who will pay for the costs of innovation. \u00a0I think the BC Liberal carbon tax isn’t the best policy, as I don’t see it reducing carbon emissions and is mute on carbon-emitting fuels being exported and untaxed. \u00a0Whichever party wins, I see the BC government as playing a key role in spurring behavior changes through investments and incentives, but who will foot the bill, particularly given a tight budget<\/a><\/strong>?<\/p>\n