A flare stack lights the sky from the Imperial Oil refinery in Edmonton on December 28, 2018. THE CANADIAN PRESS/Jason Franson

Hiking carbon tax to $210 cheapest way to hit Canada’s climate targets: commission

The federal price is at $20 per tonne now, and is going up $10 a year in each of the next three years

The Ecofiscal Commission says quadrupling Canada’s carbon price by 2030 is the easiest and most cost-effective way for the country to meet its climate targets.

But the independent think-tank also warns that might be the toughest plan to sell to the public because the costs of carbon taxes are highly visible.

The commission is issuing its final report today after spending the last five years trying to prove to Canadians we can address climate change without killing the economy. The report looks at the options for Canada to toughen climate policies to meet the 2030 goal of cutting greenhouse-gas emissions by almost one-third from where they are now.

The choices include raising the carbon price, introducing new regulations and adding subsidies to encourage and reward greener, cleaner behaviour.

The report concludes that all of those can reduce emissions but that carbon pricing stands out for doing it with the lowest cost to consumers while permitting the most economic growth. It adds that the economic benefits of carbon pricing become even greater if the revenues are returned to Canadians through corporate and personal income-tax cuts, rather than direct household rebates as is done now.

Commission chair Chris Ragan said hiking the carbon price $20 per year between 2022 and 2030, until it hits $210 per tonne, would get Canada to its targets under the Paris Agreement on cutting emissions. That would be on top of the $50-a-tonne price on carbon emissions that will be in place by 2022.

The federal price, in provinces where it applies, is at $20 per tonne now, and is going up $10 a year in each of the next three years.

Rebates would also grow to keep the tax revenue-neutral, the commission said.

The federal Liberals have promised to review the carbon tax in 2022 to determine what happens to it, but have been noncommittal about what that might be.

Canada’s federal tax is only applied in provinces without equivalent provincial systems. Right now those are Saskatchewan, Manitoba, Ontario and New Brunswick. Alberta will be added in January.

Ragan said regulations and subsidies would also work to cut emissions but are more expensive. Governments lean on regulations and subsidies, however, because their costs are often less visible to voters, making them more politically palatable, at least at first. They still distort the economy, he said, just not as obviously.

“It’s crazy to use high-cost policies if you know that lower cost policies are available,” he said. ”Why would we do that?”

Carbon prices can include fuel taxes and cap-and-trade systems where emissions are restricted and credits must be purchased to emit anything beyond the cap.

Regulations can be either very specific, such as requiring agricultural producers to capture methane from manure or cities to capture methane from landfills, or broad, such as telling industrial emitters they have to find a way to cut emissions in half by a certain date. Subsidies can mean helping people or companies install more efficient lighting and appliances or to buy electric vehicles.

Canada’s current policies are a mix of all three.

Under the Paris accord, Canada committed to cutting greenhouse-gas emissions to 511 million tonnes by 2030. In 2017, the most recent year for which data is available, Canada emitted 716 million tonnes.

A year ago, Environment and Climate Change Canada said its existing platter of policies leaves the country 79 million tonnes short. Earlier this month the international Climate Transparency organization said Canada was among the three members of the G20 group of big economies that are least likely to hit their 2030 climate targets.

READ MORE: B.C. provided $830M in fossil fuel subsidies in 2017-18: report

Mia Rabson, The Canadian Press


Like us on Facebook and follow us on Twitter.

Just Posted

EDITORIAL: A community Christmas story

Imagining a town where people shop locally

Bowlers land medals at youth 5-pin zone championships

Cariboo Bowling Lanes in Williams Lake was bustling with activity last Sunday

Christmas comes early to the Salvation Army in Williams Lake

City Furniture has donated all the food for the Salvation Army Christmas Dinner

Williams Lake rallies to help with dog’s surgery costs

Dobby, 6, needs perineal hernia surgery, owner cannot afford the vet bill

VIDEO: These are the top toys this Christmas, B.C. toy experts say

Consider the play value of a game, staff at Toy Traders say

Mayor wants B.C. to institutionalize severely mental ill people who are homeless

Those suffering from mental health conditions, such as schizophrenia, need specialized care, mayor says

Five things of note from Trudeau’s mandate letters to his ministers

Some marching orders come from the Liberal Party’s campaign, while others are new additions

Scheer’s resignation tips party into internal war over school tuition payments

The Conservatives have a Toronto convention already scheduled for April

Aid a priority for idled Vancouver Island loggers, John Horgan says

Steelworkers, Western Forest Products returning to mediation

Navigating ‘fever phobia’: B.C. doctor gives tips on when a sick kid should get to the ER

Any temperature above 38 C is considered a fever, but not all cases warrant a trip to the hospital

Transportation Safety Board finishes work at B.C. plane crash site, investigation continues

Transport Canada provides information bulletin, family of victim releases statement

Trudeau sets 2025 deadline to remove B.C. fish farms

Foes heartened by plan to transition aquaculture found in Fisheries minister mandate letter

Most Read