Amid the contentious U.S. presidential election this week, a substantial ballot initiative in Washington state went largely unnoticed, putting B.C.’s carbon tax under the microscope.
When Washington voters went to the ballot box on Tuesday, they were also asked to weigh in on Initiative 732, a proposed carbon-pricing scheme modeled closely on B.C.’s revenue-neutral carbon tax.
But the ballot initiative, which includes a similar incremental pricing gradient, tax rebates for lower-income earners and economy-wide subsidies to offset the price, touched off a firestorm debate within the environmental movement that has called into question the success of B.C.’s carbon tax itself.
A rift emerged among Washington’s climate activists leading up to Tuesday, with Proponents of I-732, including CarbonWA—the group responsible for putting it on the ballot—holding B.C. up as a model of successful market intervention in the fight against global warming.
Others, like the Washington Environmental Council and The Sierra Club have come out against the tax, according to a CBC report, claiming that B.C.’s regime actually had a negligible impact after factoring in market fluctuations and population trends.
According to Marc Lee, Senior Economist with the Canadian Centre for Policy Alternatives, B.C.’s carbon pricing isn’t the panacea many claim it to be, either economically or environmentally.
While the carbon tax has been praised for contributing up to 15 per cent of the province’s emissions reductions since Gordon Campbell’s Liberals introduced it in mid-2008, Lee argues those numbers very much depend on when you start counting.
“If you take 2007 or 2008 as your base year, then you can construct a story that BC’s emissions have fallen,” Lee writes. “But the reality is that since 2010, BC’s GHG emissions have increased every year; as of 2013 they are up 4.3 per cent above 2010 levels. More than two-thirds of this increase is attributable to the growth of BC’s natural gas industry.”
While B.C. did experience a significant drop in carbon emissions after the tax took effect in 2008, Lee attributes the fall to a wider decline in fossil fuel sales after the recession.
Indeed, the US activist group Food and Water Watch (FWW) came out strongly against what it characterized as B.C.’s “failed experiment,” claiming that any true appraisal of the carbon tax should begin in 2009.
In FWW’s account, real greenhouse gas emissions (as opposed per capita rates) rose by 5.3 per cent from 2011 to 2014, while “untaxed emissions” fell by 2.5 per cent.
I-732 proponents like the Carbon Tax Center, meanwhile, claim that any measure of B.C.’s success should begin at least in 2008, when the carbon tax actually took effect, noting that, when population growth is taken into account, emissions are actually down 12 percent per unit of GDP over 2008 levels.
As Marc Lee notes, however, “B.C.’s per capita emissions were on a steady downward trajectory well before any real action on climate change.”
Yet neither supporters nor detractors can deny that B.C.’s carbon tax was the first such pricing scheme in North America, and as such was intended as much to provide a model for subsequent legislation as it was an earnest instrument to combat climate emissions in its own right.
Hence, it is difficult to imagine Prime Minister Trudeau’s call for a nation-wide carbon pricing scheme, Initiative 732 in Washington and climate pricing even finding its way into the Conservative party leadership race without B.C. serving as the model.
Taken in these terms, B.C.’s carbon tax can be seen as a success for simply establishing a market case to be analyzed and adjusted to other jurisdictions.
“Fuel taxes of any level make a difference,” says Werner Antweiler, energy policy researcher at UBC’s Sauder School of Business, “so it is perfectly clear that carbon pricing in Washington will help reduce emissions slowly but steadily, “
“Carbon prices are no miracle cures,” he says. “The economy needs time to respond to price signals through innovation and new investments.”
Arman Kazemi, 10 November 2016