The B.C. government's Pacific Carbon Trust has become frighteningly adept at taking taxpayers' money--$14 million last year--and transferring it to big businesses.
It's time for the provincial government to scrap the Trust, and end corporate welfare disguised as environmentalism. The numbers prove that transferring tax dollars to companies through the illusion of carbon neutrality is a massive failure.
The Trust's new annual report, released in late July, shows that government agencies purchased 775,825 of the 777,992 carbon offsets sold by the Trust last year. That means 99.7 per cent of the Trust's work was funded by taxpayers.
Only 12 private companies or individuals bought carbon credits last year for a measly $54,050. The rest of the Trust's $14 million budget was funded exclusively by taxpayers, taking money out of our pockets, classrooms, hospitals and social services.
For example, the Vancouver School District was forced to buy $454,824 in carbon credits. The Vancouver Island Health Authority spent $887,926. The Northern Health Authority paid $650,466. Under provincial law, if it was a provincial government agency, it had to become carbon neutral by purchasing offsets from the Trust.
Even worse, that taxpayer money flowed exclusively into the pockets of corporations, including some of the largest companies in the province. Lafarge, a $20 billion company, was paid by the Trust for 22,998 carbon credits. Encana, an $8.8 billion company, sold 84,276 credits. Canfor, a $2.5 billion company, sold 41,573 credits. Other sellers included TimberWest and Interfor.
These companies reduced their carbon footprints through various projects such as switching fuel sources and sold the resulting pollution savings, known as carbon credits, to the Trust. The Trust acts as a middleman, buying carbon credits form private companies with tax dollars.
The Trust does not publish the cost of purchasing carbon credits from these private companies, only saying it's less than the $25 price tag they put on each carbon credit when they're selling them to various government agencies. At a conservative estimate of $20 per credit, that's almost $1.7 million to Encana, $831,000 to Canfor and almost half a million dollars to Lafarge.
When the Trust was first announced in the B.C. Liberals' 2008 Throne Speech, it was promised that it would "foster economic growth from new opportunities... [by attracting] offset purchases from private citizens, companies and other governments alike."
That hasn't happened; the Trust is still a drain on provincial taxpayers--and getting worse. Two years ago, individuals and businesses bought 6,790 carbon credits. Last year, that number fell by more than two-thirds to 2,167.
In a free market, that kind of consumer rejection would be taken as a sign to either radically change the model or get out of the business altogether. But for government, it's just another day at the office.
Government's spring 2012 announcement that $5 million of Trust funds will flow back to school districts to lower carbon emissions won't solve the problem. This will only transfer money from poorer districts to the wealthier ones that can afford capital upgrades. And the fund is still only one-third of the total cost to taxpayers--meaning millions more in corporate handouts in the years to come.
The best solution is the simplest one: scrap the Pacific Carbon Trust and keep our tax dollars out of the pockets of these private companies. While the notion of a carbon neutral government may sound nice on a website, doing it through corporate welfare hurts both taxpayers and the public services we fund.