Come Tuesday, residents of the British Columbia province in Canada will have to start paying a so-called carbon tax for reducing greenhouse gas emissions, the first in North America.
The provincial government is levying the tax on most fossil fuels, including gasoline and home heating fuel. British Columbia hopes the new policy will cause people to drive less and conserve more energy, thus leading to a significant cut in greenhouse gas emissions that contribute to climate change.
The new tax is going into effect at a time when Canadian politicians are sparring over whether or not to create a carbon tax for the whole country. The soaring crude oil price, which reached near $143 a barrel on the futures market Friday, will make it tough for Canadians to accept a higher national fuel tax.
The same can be said for any countries that are seeking to add new taxes or set mandates for reducing emissions. On Thursday, Rep. Jay Inslee (D-Washington) in the U.S. House of Representatives introduced a bill that would require utilities to pay for the electricity generated by small renewable energy producers (see U.S. Proposes Feed-In Tariffs).
California proposed a comprehensive plan Thursday that would require utilities to meet renewable energy generation goals and create a carbon cap-and-trade program (see California Offers Plan to Clear the Air). The cap-and-trade program sets out to limit emissions by businesses and industries and create a system for them to trade emission allowances.
Europe, which already has a cap-and-trade policy in place, expanded its program Friday by adding airlines to the industries it covers. European Union members reached the tentative agreement to require all airlines taking off and landing in their countries to start reducing emission in 2012.
Under the EU proposal, airlines would have to reduce emissions by 3 percent in the first year and 5 percent a year after. The emission limits will be set based on average emissions between 2004 and 2006. The European Parliament still has to approve the proposal and a vote is expected on July 9.
For Canada, the carbon tax would affect consumers’ every-day lives. British Columbia lawmakers introduced the tax in February and expected it to generate more than $1.8 billion for three years (see Policy Roundup: British Columbia Curbs Carbon, California Expands Feed-In Tariff).
The tax would add C$10 ($9.9) per ton of carbon emissions in 2008 and increase by C$5 ($4.95) per ton each year for four years. That means an additional 2.41 Canadian cents on a liter of gas (about 9.13 Canadian cents per gallon), which costs about C$1.40 ($1.38) per liter, reported Reuters.
To defray the cost to consumers, the provincial government is sending a one-time C$100 ($98.9) check to the residents and lowering other taxes.
Earlier this year, former U.S. Vice President Al Gore said he would support a carbon tax (see Al Gore Backs Carbon Tax).