We reported last week that British Columbia will implement a carbon tax of $10 per metric ton of carbon on July 1, rising in $5/tonne annual increments to reach $30 in 2012.

In both scope and size, the tax leapfrogs North America’s other, modest carbon taxes, in Quebec and the City of Boulder, Colorado. How did the tax come about? CTC supporter Jurgen Hissen filed this account from Vancouver.

The idea for a carbon tax came from the top ranks of the BC government. It wasn’t foisted upon them. I think they were actively seeking ways to justify it to the citizenry.

BC Liberals — who aren’t connected to Canada’s national Liberal Party — have always been pro small-government. When they came into office in 2001, they cut taxes and government spending extensively. BC Liberals have also historically emphasized personal responsibility and environmental issues, and a carbon tax (a consumption tax) is pretty consistent with that.

After meeting last year with California Governor Arnold Schwarzenegger, BC Premier Gordon Campbell resolved to set carbon reduction targets for BC. Suggestions of a carbon tax began circulating, but the real push likely came from Carole Taylor, Campbell’s finance minister.

In late 2007, Taylor assembled a committee, the Select Standing Committee on Finance and Government Services, to collect public input on the budget. The committee issued a questionnaire to every household in the province; how to tackle climate change covered three of the six questions, and two of them were what pollsters would call “leading”:

The Province currently provides tax incentives to encourage the purchase of hybrid vehicles [… etc.]. What tax changes would you make to encourage environmentally responsible choices? and

What tax changes would you make to discourage British Columbians from activities that contribute to greenhouse gas emissions?

Clearly, the government was looking to rationalize carbon taxes. The response was favorable, and crucial, not to mention broad-based. A carbon tax was backed by business leaders, a group of 60 economists from BC universities, and key religious leaders.

Taylor, the finance minister, reported getting 700 letters in support of a carbon tax (about 10 of those were mine, I think), and only about 160 opposed — a fact she cited on the day she announced the tax.

CTC invites readers from British Columbia or elsewhere to write with further details/insights on the development of BC’s carbon tax as well as potential implications for other provinces and the U.S.

Photo: Wikipedia

British Columbia’s Finance Minister Carole Taylor introduced a revenue-neutral carbon tax today that will serve as an excellent model for the United States. According to a story in the Canadian Press, the carbon tax will be effective July 1, will be phased in over five years and will start at a rate of $10 per tonne of carbon emissions. It will rise $5 a year to $30 per ton by 2012. The carbon tax revenues will be returned to taxpayers through personal income and business income tax cuts, according to Taylor. 

According to the same story, climate specialist Ian Bruce of the David Suzuki Foundation stated that "The Government has used the most powerful tool, a carbon tax, to reduce greenhouse gas emissions." As Bruce pointed out, "Green choices will become cheaper."

B.C. can now be proud of its natural beauty and its wise public policy designed to reduce the impact of climate change. Note that the proposed new carbon tax is very similar to the revenue-neutral, phased-in carbon tax proposed by the Carbon Tax Center. 

For more on the new B.C. carbon tax, see stories at right under "Latest Headlines." 

Photo: bfraz / flickr

California, with a well-deserved reputation for leading the way on environmental protection, has done it again. Last week the Bay Area Air Quality Management District proposed a carbon fee that would apply to all Air District-permitted facilities emitting greenhouse gases. While the proposed fee is tiny — 4.2 cents per metric ton of carbon dioxide equivalent, versus the $10.00 per ton of CO2 tax we propose to be incremented each year — imposing the fee would lay a foundation for substantial carbon taxes in the future.

As proposed, the carbon fee is not revenue-neutral; it is designed to recover some costs associated with Climate Protection Program activities related to stationary sources. The small sums that would be collected don’t appear to warrant returning the money to Bay Area residents. If the fee is increased later on, the logic for making it revenue-neutral would be stronger.

According to a story in the Feb. 9 San Jose Mercury News, the proposal has elicited strong support from the Sierra Club. The Club’s executive director, Carl Pope, got it right when he stated, “There are costs associated with emitting carbon dioxide, and the people who emit it should pay the costs."

The Bay Area AQMD’s jurisdiction is all of Alameda, Contra Costa, Marin, San Francisco, San Mateo, Santa Clara and Napa Counties plus portions of Solano and Sonoma Counties. Click here to see the full proposal. Comments on the draft rule are due March 7.