The starting line for the tar sands boondoggle
❝Alberta is sometimes called the Texas of Canada. It’s home to one of the largest rodeos in the world, a respectable number of annual tornadoes, and a plethora of oil and gas reserves. Falling in the not-quite-so-Texas category: blankets of winter snow, the way they pronounce their vowels, and most recently, a tax on carbon emissions.
The tax, which goes into effect January 2017, will add a few cents onto every dollar spent on coal, oil, and gas. When formerly cheap fossil fuels are forced to compete on even economic playing field with renewables, the thinking goes, people will choose sustainable energy…
❝A US Energy Information Administration study shows that a carbon tax like Alberta’s could reduce CO2 emissions by as much as half by 2040 (bearing in mind that comparing Alberta to the entire US is not quite apples to apples). You might recognize this strategy—using money to shape your behavior—from taxes on cigarettes, booze, and Keno. Pretty simple, pretty darn effective.
Cap and trade, the other economic climate strategy, is kind of like an inverted carbon tax. Instead of using taxes to reach a certain emissions goal, economists begin by deciding the maximum amount of carbon emissions they’ll allow. That’s the cap. But let’s think of it more like a pie, because then the regulators slice it up and auction the pieces off to energy companies.
❝“Some people look at tax like it’s a dirty word,” says Yoram Bauman, the economist who crafted British Columbia’s carbon tax. But taxes have their benefit, too. Many investors prefer a carbon tax because it doesn’t fluctuate along with external market factors. That stability lets them make long term plans. It’s also good for smaller economies, which is why Finland chose to implement the first in 1990.
Of course, given the choice most energy companies would choose neither tax nor cap—they’d just keep thrashing the commons. But the Paris climate talks are looming, and most world governments have already committed to some sort of emissions cuts. Heck, even Texas might come around.
But, uh, don’t hold your breath. The Democrats in Texas ain’t winning much and they don’t come close to the New Democrats in Canada.