Friday, May 01, 2009

Carbon Tax vs. Gateway



During the current BC election campaign there has been much discussion about the carbon tax. Some environmentalists have even endorsed the Liberal party based on the tax. But how does it stack up to other climate-related policies?

Based on numbers in the modeling done by the Carbon Tax Center, I estimated that the BC Carbon Tax would reduce greenhouse gas (ghg) emissions by 570,000 tonnes annually at the current rate and by 901,000 tonnes by  2012 when the rate is raised to $30/tonne.

I used a model developed by the Sightline Institute to estimate emissions from the Gateway Program. I calculated annual increases of 388,000 - 621,000 tonnes.  The Gateway program alone would wipe out one to two thirds of the gains made by the Carbon Tax.

During 2001 - 2006 the emissions from Oil and Gas production increased by 1,040,000 per year.  The Liberals have committed to supporting this industry so it can be expected that these increases will continue. 

These two policies (Gateway and Petroleum Industry support) would result in an increase that is more than 50% higher than any reduction from the Carbon Tax.

So why all the emphasis on the Carbon Tax when other policies will wipe out any gains made by the tax?

Notes on calculations:

Calculations used a baseline year of 2006 with total emissions of 62.3 Mt CO2 eq.

The Carbon Tax Center's model uses 0.25% reduction in emissions from gasoline consumption at a $10/tonne tax and a 1.09% reduction at $30 / tonne.  36% of the BC's emissions are from transportation. So I estimated a reduction of 244,000 tonnes for a $30 tax.  (62,300,000 x 36% x 1.09%).

The Carbon Tax Center's model uses 0.25% reduction in emissions from gasoline consumption at a $10/tonne tax and a 1.09% reduction at $30 / tonne.  36% of the BC's emissions are from transportation. So I estimated a reduction of 244,000 tonnes for a $30 tax.  (62,300,000 x 36% x 1.09%).


The Carbon Tax Center's model uses a 3.06% reduction in emissions from "other" sources at $30 / tonne.  I estimaed that another 45% of the BC's emissions would fall in this category.  (consistant with other estimates that the carbon tax would cover about 70% of BC emissions). I estimated a reduction of 657,000 tonnes for a $30 tax.  (62,300,000 x 45% x 3.06%).   This gives us a total annual reduction of 901,000 tonnes compared to baseline year when the tax reaches $30/ tonne.



4 comments:

Komanoff said...

Rob --

I'm pleased you used the carbon tax impact model I created for the Carbon Tax Center to estimate the impact of the BC carbon tax in 2012. Unfortunately, you appear to have mis-applied it, resulting in a severe underestimation -- by a factor between 2 and 3 -- of the model's prediction for the impact.

You calculate a 1.4% reduction in CO2 in 2012 for the BC tax (901,000 tonnes against 62,300,000), whereas when I run the model I find an impact of roughly 3.7%. (I estimated this by running the model for a $10/tonne start, ramping by $5/year to $30/tonne in 2012; this yielded 7.4%, which I halved as a rough way of eliminating electricity from the picture, since effectively zero electricity in BC is carbon-based).

I have some ideas as to how you might have mis-calculated. (The fact that my model isn't terrifically user-friendly didn't help, I'm afraid.) Please write or call if you'd like to discuss. But please revise your post. Many thanks.

-- Charles Komanoff, Carbon Tax Center

Rob said...

Hi Charles,

Thanks for your comments on my blog post.

Perhaps I wasn't clear enough but I didn't actually use your model directly - I just based my very rough calculations on some of the numbers in your model.

I would be interested in seeing a copy of the file as you used it for a BC tax. I did try to use the model but found it difficult to get the tax rate changes right. Also, I wasn't sure how to adjust the percentage of various sources.

rob-

Oemissions said...

When Carole Taylor, the good/evil witch with the new Green shoes was on CBC Almanac the day after the annoucement of the carbon tax, I got in the first call.
I said "Its not ENOUGH, Carole."
We should be taxing the heck out of this overuse and basically unregulated use of the automobile.
The social costs are BILLIONS.
Drivers donot consider this. They got sold on driving decades ago and this addiction to driving will be difficult to cure.
Ofcourse the ruralites got on about how they have to drive and this only benefits cityfolk.
Well, I was brought up rural and I know about their driving ways. I doubt very much if they would use any form of convenient public transit.
Where I live, we finally got a bus, and people use the excuse that it doesn't come up their road. I say, well, park and ride. Too inconvenient for them.
The Inconveniebt Truth. The average Saltspring Islander,according to a CRD study does 6.5 trips a day.Paradise Lost!!
Drivers whine if they get a 2 cent raise in gas tax. To get a plastic bag now from the grocery store it costs 5 cents.
The belligerence from drivers is exasperating and I am sick of having to share my streets and pathways with them. How dare you blow your exhaust in my face and my grandchildren's faces
You fill up our hospitals and morgues from your accidents and take up a huge portion of our tax dollars to support your habit. The Noise is ubiquitous.
My home is always dusty. The streets are filthy.
Your attitudes are most often discourteous to pedestrians and cyclists.
I 've had enough.
Why does Health Canada allow the use of these things?
They remove plastic bottles and meat suspected of listeriosis and toys with lead, but .. about your precious automobiles, they
hold their breath and noses.
We need more than a carbon tax. We need a crimes against humanity tax. These are weapons of mass destruction.

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