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.