Amusing to me that the BC carbon tax is being called a fee and dividend system. People are so afraid of that "tax" word! In BC they call it a revenue neutral carbon tax because income taxes were reduced to balance it.
I didn't mean to suggest I'm opposed to a price on carbon. It is very clear it won't kill the economy and can't hurt to push things in the right direction. My feeling is that without regulation such as a cap on carbon or mandatory closure of things like coal plants (as was done in Ontario) or regulation of fuel economy the movement away from carbon is very slow.
Even a huge tax on carbon alone (as we've seen in Europe with petrol taxes) has a rather small relative impact on carbon usage. It pushes things in the right direction but the moves are small.
The vast majority of the Canadian population (BC, Ontario, Quebec) are served by almost carbon free electricity. The problem of carbon emissions here relates to extraction and export of carbon and to cars/trucks. Perhaps instead (in addition to?) a carbon tax on carbon extracted we just need much higher royalties on the carbon. Unfortunately that won't happen because as we've already seen the multinationals threaten to cut back on extraction when the royalties go up. That would work, is so much simpler and isn't a direct tax on individuals - won't happen though.
ghoti,
First, it is nice that you are amused by the use of the term "Fee", when the F&D plan that I cited does call for a carbon sales tax and a carbon tariff; however, taxes do not result in dividend payments back to the general public, while in the F&D plan that is exactly what happens.
Second, if the F&D plan implemented in BC has not made a significant impact on GHG emissions yet, it is probably because of a combination of local factors including: (a) the hydropower available in BC is already clean; (b) the general public in BC is wealthy enough to continuing paying high fuel prices to drive; and (c) the plan started with a $10 per ton price on carbon while the following Forbes article quotes (see extract) Milton Friedman school economists citing that the carbon fee should be at least $40 per ton, and should be implemented worldwide, rather than just in BC.
http://www.forbes.com/sites/jeffmcmahon/2014/10/12/what-would-milton-friedman-do-about-climate-change-tax-carbon/Extract: "Estimating the cost is tricky, Greenstone said, but scientists and economists have models for projecting the cost of each added ton of carbon on agricultural losses, mortality, sea-level rise, storm surge, and other climate effects.
“It’s a complicated task but I think the best evidence suggests that it’s probably around $40 a ton,” he said. The U.S. government has projected the cost of carbon emissions at $37 per ton.
One audience member challenged the economists at this point, saying Friedman would not be so cavalier about a tax when there is uncertainty about its optimum level and likely effects.
“There is uncertainty,” Cicala replied. “There is no question. Name me another policy where there was no uncertainty.”
The uncertainty, Cicala said, “should have us terrified”—not terrified of the effects of a price on carbon, but terrified of the effects of increased carbon concentrations in the atmosphere and ocean."
The fact that Milton Friedman school economists are honest enough to discuss the reality of climate change, clearly indicates that climate change is not conservative vs liberal partisan issue which has grid-locked Washington DC. Implementation of an F&D plan would satisfy Milton Friedman's goal of allowing the "invisible hand" of the market place to pick the winning combination of technology; and would satisfy the climate hawks such as James Hansen who explicitly is supporting the F&D plan because the dividend makes the plan work without destroying the economy (because the plan is monetarily neutral).
edit: I add that as there is uncertainty in how to price carbon, and as this price will certainly change in the future, the F&D plan calls for the carbon fee to be raised incrementally in the future until carbon emissions are controlled (and again even high carbon fees would not destroy the economy as the dividend would allow the general public to hire workers to do things such as: install insulation & PV panels, buy EVs, and invest in wind-power developments; and the higher the carbon fee the more effective the dividend would be in promoting sustainable activities). Also, I note that the Freidman economists correctly point-out that as carbon emissions negatively impact third parties, that having no carbon fee is equivalent to supporting theft.
Best,
ASLR
