Alberta’s “all hat, no cattle” carbon tax is forcing climate failure on Canada. BC carbon tax is 85 times larger.

2 Apr

Barry Saxifrage – April 1st, 2013

When it comes to fighting climate change, Alberta is “all hat, no cattle”. They talk a good story but their weak climate policies allow their climate pollution to surge out of control, forcing climate failure on our nation.

The Alberta Government repeatedly highlights what it claims is its cutting edge carbon tax of $15 per tonne of carbon dioxide (tCO2). Just last week they paid $30,000 to run a half page ad in the New York Times lobbying for the Keystone XL pipeline, proclaiming:

“Alberta already has a $15 price on carbon.”

Oddly, they left out the fact that only about 2% of Alberta’s emissions pay their carbon tax.

I wonder if they sell oil the same way in Alberta? “We charge $60 per barrel but you can have 98% of the barrels for free.”

And what about their other Pigovian taxes? Does Alberta collect tobacco taxes on only 2% of cigarettes? Do they collect alcohol taxes on just 2% booze?

Somehow I think not.

Here are the actual carbon numbers. Alberta’s economy dumped 230 million tonnes of CO2 and collected $55 million in carbon taxes. That works out to 25 cents in carbon tax for each tonne of climate pollution emitted by Alberta’s economy.

 

 

For perspective, 25 cents is one hundred times less than the damage climate pollution causes. That is according to the International Monetary Fund’s (IMF) new report, “Energy Subsidy Reform“, which estimates $25 in damages caused by every tonne of CO2 emissions.

As an economic signal to the Alberta economy, a mere 25 cents per tCO2 won’t come anywhere close to solving the province’s runaway climate problem.

Even the Harper Government agrees

Environment Canada predicts that Alberta’s climate pollution will shrug off the province’s weak climate policies and continue to increase dramatically. The latest “Emissions Trends 2012” report from Environment Canada has the dirty details. Take a look:

 

Clearly Alberta’s climate policies are the least effective of any province in Canada at reining in climate pollution.

Alberta driving Canada’s climate failure

Prime Minister Stephen Harper made an international pledge that Canada in 2020 will have reduced our climate pollution (to 83% of our 2005 level).

But Environment Canada predicts Alberta’s spectacular climate failure will almost single-handedly force our nation to fail.

Below is a chart showing how close Environment Canada estimates current climate policies will bring each province — and Canada — to meeting the 2020 target (83% of 2005 emissions). Notice that Alberta is expected to cause three-quarters of our national failure:

 

Canada can’t succeed until there is an effective policy on Alberta’s climate pollution. It’s that simple.

If you want the expert view of a Conservative Party insider:

“For Canada to achieve its national target … Alberta’s emissions have to come down further and faster than anywhere else … The challenge is clear: Canada cannot meet its GHG target without Alberta”  — David McLaughlin, former chief of staff to Prime Minister Mulroney; former chief of staff to Minister of Finance Jim Flaherty; CEO of the federal government’s National Roundtable on the Environment and the Economy.

Three hundred times less than needed to meet targets

So what is needed in Alberta?

The federal government’s National Roundtable on the Environment and the Economy (NRTEE) did economic modelling on what would be needed to meet our 2020 climate pledge. As far as I know it is the only such government modelling that has been made available to the public.

NRTEE found that we would need either:

  • an economy-wide carbon price of around $75 per tCO2. This is 300 times more than the 25 cents per tCO2 in Alberta’s economy today.

or

  • targeted carbon pricing ranging from $100 to $150 per tCO2 for more than 40% of the emissions to be cut. Alberta was no exception.

Alberta isn’t close on either count, as its emissions show plainly.

The question for all Canadians becomes whether Alberta will raise its $15 carbon tax rate high enough, soon enough? And whether they extend their carbon tax to more than 2% of their economy’s carbon pollution?  

So far Alberta has never raised its carbon tax rate. Five years, no increase. BC has raised their carbon tax three times in four years. With just seven years left to meet the Prime Minister’s pledge, Alberta is running out of time to do their fair share.  

Worse than nothing?

The whole point of a carbon tax is to try to significantly reduce carbon pollution.

At least that is what it is supposed to be used for. In Alberta, however, their carbon tax is apparently being used to usher in significant increases in their carbon pollution. Their New York Times ad, mentioned above, is just one such recent example of using a policy that cuts tiny amounts of climate pollution to justify vastly larger increases in climate pollution.

The Keystone XL pipeline alone is a commitment to another five billion tonnes of climate pollution coming out of Alberta’s “carbon bomb”-sized bitumen deposit.

If Alberta can successfully use their inadequate carbon tax to greenwash increasing emissions at this scale then having a carbon tax may end up more climate damaging that not having one at all.  

Compared to BC’s Carbon Tax?

BC also has a carbon tax. The BC rate is currently $30. A casual observer might conclude that it is twice as strong as Alberta’s $15.

But in reality BC carbon tax is 85 times more per tCO2 in their economy.

That is because Alberta applies their carbon tax to just 2% of emissions, while BC applies theirs to around 70% of emissions.

BC has emissions of 56 million tonnes of CO2 and expects to collect $1.2 billion this year in carbon taxes. That works out to nearly $21 in carbon tax for each tonne of climate pollution emissions in their provincial economy.

 

Despite BC’s effective carbon tax being 85 times larger than Alberta’s, it still isn’t enough to meet BC’s goals. As Environment Canada data shows, even with their carbon tax, BC’s emissions are projected to keep rising through at least 2020. So even British Columbians will need higher carbon pricing — and soon — if they want to meet their own provincial goals or allow Canada to meet our nation’s climate pledge.

Other nations do it, why can’t Alberta?

Norway is a large oil exporter with climate pollution levels similar to BC’s. They collect $26 in carbon tax for each tonne of climate pollution emissions in their national economy. They have different carbon tax rates for different parts of their economy, with the highest rate being $71 per tCO2 for their oil industry.

Australia is a huge fossil fuel exporter with climate pollution levels similar to Canada’s. The Aussies just voted for an economy-wide carbon tax rate of $24 per tCO2. As in BC it will be applied to around 70% of emissions. This will result in the nation collecting nearly $17 in carbon tax for each tonne of emissions in their economy.

If these nations with significant fossil fuel export economies can do it, why can’t Alberta?

Republished from the Vancouver Observer: http://www.vancouverobserver.com/blogs/climatesnapshot/albertas-all-hat-no-cattle-carbon-tax-forcing-climate-failure-canada-bc-carbon

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