It's Time to Put a Price on Carbon

It's Time to Put a Price on Carbon
Posted on March 25, 2014 | Rolly Montpellier | Written on March 25, 2014
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Author's Note:

Author's Note:

Canada is one of the world’s leading per capita sources of atmospheric greenhouse gases. And yet the Harper government continues to shirk its international responsibilities in climate change talks. Once considered a strong environmental steward, Canada has become the joke of the global community attempting to tackle the defining issue of our generation - climate change.

The science is settled. Our planet is heating up, and carbon pollution from Dirty Energy is to blame. The fossil fuel industry burns oil, coal and gas, sending heat-trapping emissions into the air. Ninety million tons of carbon pollution enters the atmosphere every day. That means a hotter world for all of us.

It’s Time to Put a Price on Carbon

Nine of the ten hottest years on record were in the past twelve years. Carbon pollution also leads to Extreme Weather - violent rainstorms, prolonged droughts, hurricanes – as well as unprecedented Arctic ice melt, wildfires and severe flooding everywhere on the planet.

Climate change is already happening, and it has entered our daily lives. We are all paying the price of carbon pollution – higher food prices, water scarcity, property damage, loss of wildlife, higher insurance premiums, lower crop yields, ecological damage.

The United States is second only to China as the leading emitter of CO2 on the planet. Canada is one of the world’s leading per capita sources of atmospheric greenhouse gases. North Americans must take decisive steps now to reduce their emissions through a comprehensive energy strategy and encourage other nations to follow. An essential component of such a strategy is the introduction of a transparent and effective carbon pricing mechanism.

Carbon Fee and Dividend

There are at least five ways to put a price on carbon. The most transparent carbon pricing instrument is the Carbon Fee and Dividend promoted by the Citizens’ Climate Lobby. The carbon fee is a straightforward fee. It is easily explainable and understandable. It requires no time to set up; it’s easy to monitor and it requires no additional bureaucracy.

The federal government would charge a Carbon Fee on fossil fuels where they first enter the economy as a way to stimulate the transition away from fossil fuel dependence and towards clean energy alternatives. A direct and steadily-increasing carbon fee will accelerate this transition by erasing fossil fuels’ artificial price advantage over energy efficiency and low-carbon energy.

The Carbon Fee and Dividend is a revenue-neutral price on carbon. All of the money collected would be returned to Canadians on an equitable basis. The fee increases steadily each year so that clean energy is cheaper than fossil fuels within a decade.

Data compiled by the Citizens’ Climate Lobby shows that (in Canada) under this plan, 66% percent of Canadian households would break even or receive more in their dividend cheque than they would pay for the increased cost of energy, thereby protecting the poor and middle class.

A predictably increasing carbon price will send a clear market signal which will unleash entrepreneurs and investors in the new clean-energy economy.

Sweden imposed a price on carbon in 1990 that is now 100 Euros per ton – a significantly hefty price. Since 1990, Sweden has reduced emissions while GDP has risen 36%, demonstrating that a substantial fee is effective in reducing emissions without harming the economy. From the David Suzuki Foundation Newsletter:

"Although some critics claim a carbon tax would damage the economy, Sweden's carbon tax is a hefty $140 per tonne of carbon pollution. Since the carbon tax was introduced, Sweden's economy has grown by more than 100 per cent, and the country recently ranked fourth in the world on economic competitiveness."

More than five years ago, British Columbia implemented a carbon tax shift, and the outcome has so far been good both for the environment and the economy. British Columbians emitted 9.9% less greenhouse gases in 2010 than when the tax started, compared with 5% fewer emissions for the rest of Canada. BC’s GDP growth actually outpaced the rest of Canada’s after the tax was imposed. This is in line with evidence from seven other countries with similar policies that have had neutral or slightly positive effects on GDP.

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About The Author

RMontpellier-BoomerWarrior's picture

Rolly Montpellier is a Climate Leader (Certified by the Climate Reality Project) a blogger, writer, activist and the founder of BoomerWarrior.Org.

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Comments

Karin Lengger

I couldn't agree more. In fact, I would go one more step further and say that all externalized costs should be internalized-absorbed by the entity creating the cost or the risk of the cost, like an oil spill. This would accelerate changes to more sustainable and equitable world.

Thank you for your comment Karin.

I agree that externalities must be considered in the pricing of carbon. As the price per ton increases, my thinking is that the revenue generated automatically covers the costs you mention. In most cases, the direct costs of oil spills are borne by the petroleum company or pipeline company. Indirect costs should be covered by the revenue from the carbon pricing mechanism in place.

Thank you for your comment Karin.

I agree that externalities must be considered in the pricing of carbon. As the price per ton increases, my thinking is that the revenue generated automatically covers the costs you mention. In most cases, the direct costs of oil spills are borne by the petroleum company or pipeline company. Indirect costs should be covered by the revenue from the carbon pricing mechanism in place.

Robert Alstead

I agree we need to price carbon. I live in BC where the carbon tax is $30 and I've barely noticed it.

It sounds like you advocating for the BC model (although possibly including 100% rather than just the 70% of emissions from fuel burning), but what would the starting price be per tonne of carbon? And would it rise incrementally each year as BC's did when it was launched in July 2008?

Thank you for your comment.

I did refer to the BC model as an example of a mechanism that is working out. I wasn't aware that only 70% of emissions from fuel burning are included in the program. To be perfectly honest, I've not thought out the details of any specific plan for pricing carbon. I'm familiar with the Fee and Dividend program proposed by the Citizens Climate Lobby.

A starting fee of $30 seems to have been accepted by citizens of BC. So why not start at that level in other provinces? However, with the release of the IPCC's latest report, it will be essential to ramp up the price per ton quite rapidly if we are to have an impact on reducing emissions before it's too late. Sweden's rate is over $100 Euros and the country's economy continues to outperform many competitors. So I suggest going from $30 to $100 is 5 years.

Yes that article does sound familiar. A simple solution that we could easily implement. The problems - no political will, too much lobbying by fossil fuel industry, vested interests, too much money in politics and finally an apathetic public.

And yet British Columbia has done the courageous thing by legislating carbon pricing five years ago. And yet, the sun still rises every day in BC. Who knew?

Joe Wallach

The science is settled? Really? Read the following:

"4. Former NASA Scientist: Global Warming Is 'Nonsense'

A prominent scientist and former NASA researcher has added his voice to those who challenge the "scientific fact" that manmade carbon emissions are causing global warming.

Dr. Leslie Woodcock is a professor emeritus of chemical thermodynamics at the University of Manchester in England, with a Ph.D. from the University of London, and served as a senior research consultant at the Wright-Patterson Air Force Laboratory in Ohio.

In an interview with Britain's Yorkshire Evening Post, Woodcock declared: "The theory of 'manmade climate change' is an unsubstantiated hypothesis.

"The theory is that CO2 emitted by burning fossil fuel causes 'global warming.' In fact, water is a much more powerful greenhouse gas and there is 20 times more of it in our atmosphere [than carbon dioxide].

"Carbon dioxide has been made out to be some kind of toxic gas but the truth is it's the gas of life. We breathe it out, plants breathe it in. The green lobby has created a do-good industry and it becomes a way of life, like a religion. I understand why people defend it when they have spent so long believing in it."

Woodcock is also a Fellow of the Royal Society of Chemistry, a founding editor of the journal Molecular Simulation, a recipient of a Max Planck Society Visiting Fellowship, and a former guest scientist at the U.S. National Institute of Standards and Technology.

He went on to say: "If you talk to real scientists who have no political interest, they will tell you there is nothing in global warming. It's an industry which creates vast amounts of money for some people.

"The temperature of the earth has been going up and down for millions of years. If there are extremes, it's nothing to do with carbon dioxide in the atmosphere, it's not permanent and it's not caused by us. Global warming is nonsense.

"It's become almost an industry, as a consequence of this professional misconduct by government advisers around the world."

But he added: "You can't blame ordinary people with little or no science education for wanting to be seen to be good citizens who care about their grandchildren's future and the environment."