THE BLOG

B.C.'s Carbon Tax Is No West Coast Panacea

10/31/2013 11:35 EDT | Updated 12/31/2013 05:12 EST
The carbon tax lobby was practically giddy this month, as newspaper headlines touting a B.C. climate change agreement with three U.S. states blared, "Washington and Oregon follow B.C.'s lead on carbon tax system," and "Washington, Oregon plan to emulate B.C.'s carbon tax."

Fortunately for American taxpayers, the headlines just aren't true.

The non-binding, symbolic agreement calls on each jurisdiction to "account for the costs of carbon pollution," along with various transportation goals such as high-speed rail, alternative fuels and the usual promises to push federal governments to do more on carbon emissions.

Despite the headlines, a carbon tax was not agreed upon. American media were much clearer in what was: "Modest steps," said California governor Jerry Brown, who is far more interested in promoting his state's cap-and-trade plan.

Governor John Kitzhaber said he didn't know what system Oregon would use to put a price on carbon.

B.C.'s most direct economic competitor, Washington, is leaning toward cap-and-trade, not a B.C.-style carbon tax. This keeps the so-called "Blaine drain" going: using cheap gasoline as a way to continue attracting more than 15.4 million Canadian cross border shopping trips into Whatcom County every year.

Further, U.S. governors don't have the power to unilaterally agree to anything. Indeed, Washington Gov. Jay Inslee is already being criticized for signing this agreement and possibly undermining the work of a bipartisan committee he set up. To get anything done, the Democrat Inslee will need the support of the Republican-controlled state senate, which is flagging economic competiveness concerns.

The real attraction in these types of agreements is the photo opportunity they give the signees. The deals happen and then disintegrate regularly. Alaska already refused to sign on to the accord, despite being part of the Pacific Coast Collaborative that negotiated it.

Oregon and Washington both dropped out of the Western Climate Initiative, a Gordon Campbell-era group. The California cap-and-trade exchange, originally supposed to have 11 members, is down to just the Golden State and, puzzlingly, Quebec.

Who can forget the hydrogen highway that was going to run from Los Angeles to Whistler -- and the photo-op of then-California Gov. Arnold Schwarzenegger with his hydrogen Hummer? Today, there are only three hydrogen-fuel-cell cars to be found in the Lower Mainland, and a fleet of 20 hydrogen buses in Whistler -- despite government spending at least $89.5 million on the project.

These agreements seem to be about throwing a bunch of half-cooked ideas against the wall and seeing what might stick.

While acknowledging that there has been economic damage caused by the carbon tax and thus freezing it, the BC Liberal government still clings to the notion that neighboring jurisdictions will adopt the tax and voluntarily make themselves just as uncompetitive.

Five years later, B.C. still stands alone with a carbon tax, much to the dismay of our struggling agricultural and manufacturing sectors, and many groups outside the Lower Mainland. Key liquefied natural gas competitor, Australia, is in the midst of repealing their carbon tax.

Meanwhile, the carbon tax lobby is pushing for the B.C. tax to be raised to $200 per tonne -- seven times B.C.'s current level. That would raise the carbon tax on gas to 45 cents per litre -- on top of federal excise, GST, provincial excise and transit taxes. You can bet the Americans won't go there - no matter how good the photo-op.

B.C. should scrap the carbon tax, give relief for cash-strapped families, and provide a much-needed shot of adrenaline for our post-HST economy.