Carbon Pricing 101
What is a Carbon Tax? A fee placed on greenhouse gas pollution mainly from burning fossil fuels. Making it revenue-neutral means that funds raised go back into the pockets of taxpayers and businesses.
Carbon Tax in other Jurisdictions:
- Sweden instituted a carbon tax in 1990. It is now at $100/tonne and has helped transform the Swedish Economy into an innovative green leader.
- BC instituted a carbon tax in 2008, starting at $10/tonne and rising to $30/tonne. This revenue neutral tax has proven effective and popular, meanwhile the economy has not collapsed, but actually performed better than neighbours.
- Alberta has announced carbon tax starting in 2017 at $20/tonne rising to $30/tonne in 2018.
- Nationally 85% of Canada’s population will have some form of carbon pricing by 2017(either cap & trade or carbon tax), Prime Minister Justin Trudeau suggested at the Vancouver Declaration that pricing options will be adapted to the specific circumstances of each province and territory. There will be an Autumn meeting to identify the mechanism each jurisdiction will take.
- NWT is developing an updated Climate Change Strategy and are investigating the options for Carbon Pricing. Now is the time to make our voices heard!
Ecology North developed a discussion paper on an NWT carbon tax in the winter of 2016 that outlines recommendations for implementation, including: carbon tax background, recommendation for rates, options for taxation and the estimated impacts on people and businesses in NWT.
Ecology North recommends following Alberta’s lead and initiating a $20/tonne price on carbon rising to $30/tonne in short order. This tax would equate to:
|Gasoline, aviation fuel and diesel (incl. heating fuel)||5.5 cents/litre||8.3 cents/litre|
|Propane||3.1 cents/litre||4.6 cents/litre|
|Natural gas||3.8 cents/litre||5.8 cents/litre|
One acknowledged drawback of a carbon tax is the inelastic demand of consumption to the price of fuel. Previous studies indicate this tax might reduce fuel use by approximately 5%. Therefore, we are recommending using a portion of the revenue to expand green energy solutions to reduce and replace fossil fuels and make a much greater impact. Another important consideration is protecting low income, and remote communities who have fewer options available to reduce emissions and the impact on the cost of living
A carbon tax will generate $18 to $32 million in annual revenue that would be recycled back into the economy by allocating half to tax cuts and rebates and half to energy efficiency and green energy investments. Green solutions would focus on energy efficiency, green financing and clean energy solutions implementable at a community scale (i.e. focusing on communities, small businesses and residents).
It is important to recognize that carbon pricing is just one step in the NWT’s transition to 100% green energy. We have already begun this transition, as leaders in biomass energy. Introducing a robust carbon tax will herald our arrival on the national stage, and show leadership for other northern jurisdictions.
What can you do to encourage a carbon tax in the NWT?
Learn more about what a carbon tax means, talk to your neighbours and friends about it. We must reverse negative publicity about this simple yet elegant redistribution of our tax dollars.
Contact your MLA (or better yet all MLAs):
|Robert C McLeod||Robert_C_McLeod@gov.nt.ca|
The GNWT is currently consulting NWT residents about the 2017/18 budget. Let them know that you think a carbon tax is a good idea. Email: firstname.lastname@example.org
For an in-depth look at carbon pricing in the north, and further resources, see: Carbon Pricing for the NWT - Discussion Paper
- BC Carbon Tax Myths & Realities
- BC's Carbon Tax - Pembina Institute
- Greening the NWT Economy
- Revenue Options 2010 - Discussion Paper
- Understanding the Proposed NWT Carbon Tax