Smoky River Regional Economic Development

Dan Dibbelt
Smoky River Regional Economic Development


Carbon Tax, Part I

According to the World Bank, Global Carbon Project, six countries are responsible for 60 per cent of the worlds CO2 emissions.

China is the number one emitter responsible for approximately 30 per cent of the world’s emissions. That number is expected to double by 2040, if China does not start addressing this issue.

The United States is in second place emitting 17 per cent of world emissions. The other four major emitters are the Russia, India, Japan and Germany with a combined emission of about 16 per cent.

Canada ranks in ninth place with our percentage amounting to about two per cent of world emissions.

Living in northern Alberta, home of the notorious oil sands, I think we sometimes over estimate the amount of CO2 we contribute to the world’s greenhouse gas emissions. If we think of the world as a 10-storey, 100 suite apartment block, and each suite represents one per cent of carbon emissions.

China alone would occupy three full floors. The United States would use one and three quarter floors, Russia and India combined would take up another floor. Japan, Iran, Saudi Arabia and South Korea, use up another floor. Germany, France, Spain, Italy and the UK take up another floor. The balance of two and a quarter floors, or about 22 suites are utilized by the rest of the world with Canada, occupying two suites.

I used to live in a condo complex with 18 suites. I sat on the condo board along with the rest of the owners and I recall getting some sort of consensus among the owners was a challenge, especially since a larger corporation owned more than half the units as rental properties. If the majority of owners did not take care of their property; kept their yards tidy and kept litter in the trash bins, regardless of how impeccable I kept my yard, the whole complex looked pretty shabby.

Canada, in the world picture is pretty small stuff. The reality is anything we do to curb greenhouse gas emissions will hardly be noticed. That being said, it’s not a bad idea for us to be responsible world citizens. And the federal government is doing exactly that, looking at a carbon emission program to reduce our emissions.

The Alberta government has already implemented a carbon tax, a form of taxation that, like many others, hits the user with the intention of encouraging users to reduce their carbon footprint.

Luxury taxes, taxes on cigarettes and alcohol, are a classic example. The tax is similar to a provincial sales tax, but the tax is specifically geared toward carbon producing products, car fuel, electricity and home heating are some examples.

One major difference between these two types of taxes is that revenue from provincial sales taxes or a luxury tax goes into the governments general revenues, while a carbon tax is intended to be used specifically to fund innovation in reducing our use of carbon emitting products and services.

A carbon tax is a form of pollution tax levying a fee on the production, distribution or use of fossil fuels based on how much carbon their combustion emits. The Alberta government has set a price per ton on carbon, that then translates into a tax on electricity, natural gas or oil. Because the tax makes carbon emitting fuels more expensive, it encourages utilities, municipalities, businesses and individuals to reduce consumption and increase energy efficiency.

A carbon tax can also make alternative energy more cost-competitive if the tax dollars raised are used to subsidize alternate energy production opportunities.

The Alberta government plan is expected to raise as much as six billion dollars. While much of the taxes will come from larger corporations, some of it will come from you and I the average tax payer.

Albertans are told to expect to pay an extra seven cents per litre for gasoline and $1.68/ GJ for natural gas by 2018. The province estimates the carbon tax will amount to roughly $470 in increased heating, electricity and transportation costs for an average household in 2018, assuming that household consumes the same amount of fossil fuels as it did in 2015.

But, living in northern Alberta, are we your average household. Next week’s column will look at that and other aspects of a carbon tax.

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