On the carbon tax

Warning: I don’t spend a lot of time thinking through issues of global warming and the best ways to mitigate it. However, I am curious about this whole carbon tax debate.

A few years ago I had coffee with a guy who was an adamant supporter of a “revenue-neutral” carbon tax under which the price of fuel would more than double to about 1.50/litre but consumers would get that back in tax cuts elsewhere. Essentially, it would raise the cost of carbon emission activity but cut elsewhere so that the overall hit on consumers would be neutral. He told me in my case, the cost of running my car, heating my house, etc. would go up by a few thousand but I would get that back in income tax reductions by a similar amount.

Well, funny thing about these things is that we are almost at $1.50/litre without a carbon tax and the government is taking in windfall taxes from the high cost of gas (although NB did cut a few pennies off its gas tax when the Libs got in).

So, now everyone is freaking out about a ‘carbon tax’. Al Hogan is turning red, chomping the cigar and yelling at his minions to crank out anti-carbon tax stories.

Question for those of you more tuned into this stuff: What is wrong with a carbon tax if you get it back elsewhere and it encourages more conservation and new technology utilization? Can we be a ‘cheap’ energy province and have a ‘carbon tax’?

Questions. Questions. Questions.

On July 1, 2008, subject to approval by the legislature, British Columbia will begin to phase in a fully revenue-neutral carbon tax.