Article pans idea that carbon (dioxide) taxes will be revenue neutral

The National Post has an interesting editorial on the topic of using carbon (dioxide) taxes as a means of reducing energy demand.

The author is not convinced that the taxes will do anything other than impact heavily on the poor and middle income groups. He’s in good company making that assumption because other energy and tax experts* have noted that until carbon (dioxide) taxes reach the $125 per ton range, they are unlikely to have any significant or long-lasting impact on consumer behavior. Until that breaking point is reached — and well after, during transition phases — every day items like food, gasoline, and most retail goods will become progressively more expensive. Supplying those basic needs will leach more and more dollars from everyone’s bank accounts.

* From information presented by Ventyx at ACC Spring Coal Forum
Postconference Seminar on Climate Change – March 12, 2008

Energy prices are going up. Oil has hit record highs, resulting in
higher transportation costs. Food prices are increasing. It is also
becoming more expensive to heat homes and drive the family vehicle. And
Canada doesn’t even have a carbon tax. Yet, environmentalists are
calling for one all the same, saying it will be economically painless.
This is nonsense. The world is not melting but our standard of living
soon will be if global-warming alarmists have their way.

now Canada’s two main political parties, the governing Conservatives
and Opposition Liberals, had both publicly opposed a carbon tax. Over
the weekend, Liberal leader Stephane Dion announced he now favours a
national tax on energy to curb consumption.

The theory behind any
tax intended to alter behaviour is that if you tax something, you will
get less of it. Carbon taxes are meant to get Canadians to use less
energy. In fact, all they will accomplish is to make Canadians pay more. …

Mr. Dion … favours a so-called revenue neutral tax. But as
in B.C., it won’t be neutral for taxpayers: Higher energy prices will
hit families with kids the hardest. And what will it accomplish?
Premier Gordon Campbell’s goal is to reduce the province’s CO2
emissions by 40 million tonnes by 2020. Yet, the current carbon tax
policy is expected to reduce greenhouse gases by only three million
tonnes, about 7.5% of the total. If the price of a 7.5% CO2 reduction
is more than $15-billion, taxpayers can only imagine what it will cost
to cut the other 92.5%. And taxpayers remember the previous federal
Liberal government spent $6-billion to reduce emissions and the
country’s greenhouse gases instead grew by 33%.

In 2000, the
price of a litre of gasoline in Canada was 72¢. Five years later, it
jumped to 92¢. Over that period, gas consumption increased 1.7% a year.
Today, the average pump price is roughly $1.12 per litre. That’s a 55%
increase in eight years and people are still driving.

It would seem that if a carbon dioxide tax is implemented, the average person is in for a lot of belt tightening.

19. March 2008 by
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