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Everything you need to know about the carbon tax

 

By Laura Bohnert

The crunch was on before the arrival of 2017. The imminence of a carbon tax that was expected to drive oil and gas prices up at its advent had people taking to the streets in the most Mad Max of fashions: road warriors fighting their way through the lineups of war boys to get to the much needed “Guzzoline.”

No incidences of people spray painting their mouths silver or stringing guitarists to the roofs of their trucks have been reported, but the intensity of the gasoline anxiety was prevalent, nonetheless.

Of course, in Y2K fashion, much of the anxiety appears to have been unnecessary. Those who filled their Y2K or zombie apocalypse fallout shelters with jerry cans of gasoline will most likely be disappointed to discover that gas prices actually dropped a bit following 2017’s introduction of the carbon tax. So what exactly is it we’re all welding Mad Max spikes onto our cars for anyway?

The equivalent of a 3 per cent sales tax. The 2017 carbon levy has introduced a carbon tax of $20 per tonne for all carbon-dioxide emissions. That amount will increase to $30 per tonne in 2018, which just brings it up to par with a carbon tax that has existed in BC for nine years. The difference is that BC’s carbon tax is used to lower income taxes for the province. Alberta’s carbon tax will go towards government programs, and over the next five years, more than $2.3 billion will be used to offer rebates to lower- and middle-income families.

But what exactly is the point? If the money isn’t being put back into environmental programs, then how can implementing a carbon tax actually be benefitting the environment—or is it just a political tactic (one that perhaps isn’t going so well for Rachel Notley and her NDP government)?

Despite all of its ambiguity, it does have the potential to help. The carbon tax essentially allows the government to charge for carbon, and doing that in such a way that enables the government to reinvest the revenue back into rebates and other government programs really is the most cost-effective way to incentivise greenhouse gas emission reduction. The fee, which translates to an added $191-$338 expense for the typical household, provides a financial incentive for individuals to consume less carbon, thereby decreasing their carbon footprints and their impact on an environment that is clearly suffering under the effects of climate change.

That incentive can also go a long way towards driving innovations that may expand our industry, create more jobs, and allow the economy to move further away from its oil and gas dependence—a dependence from which Alberta’s economy is currently experiencing a lot of consequences.

But there’s another aspect to it, too. Not only is the carbon levy designed to Robin Hood a little extra financial assistance for lower- and middle-income families, but it also allows the government to barter for social investments in exchange for approving more pipeline access and development, and that’s an important step that could mean diverting a bit more of those oil and gas profits into investments that can help to better expand and diversify Alberta’s overall economy.

In other words, investing in the environment may have more merit than the popular perception of merely throwing money into the myth of global warming.

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