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Carbon tax working, minister insists

Graph in latest carbon tax report shows decline in overall emissions that was largely caused by recession, and increase after the economy began to recover. - Ministry of Environment
Graph in latest carbon tax report shows decline in overall emissions that was largely caused by recession, and increase after the economy began to recover.
— image credit: Ministry of Environment

B.C.'s greenhouse gas emissions fell 4.5 per cent in the first four years of the carbon tax on fossil fuels, but most of that drop was probably the result of a world recession rather than the steadily increasing tax.

Environment Minister Terry Lake released the latest emissions report Wednesday, insisting that B.C. is on track to meet its interim target of a six-per-cent reduction in greenhouse gases this year. The latest federal government emission figures are for 2010, and in that year B.C. emissions crept up again after two years of recession and fuel use decline.

Lake said the global financial crisis of 2008-09 is likely responsible for a three per cent drop in emissions since the carbon tax took effect. The other 1.5 per cent came as B.C. residents chose to reduce their fossil fuel use, partly due to the tax and also because of the steep increase in gasoline prices.

Lake acknowledged that it will be "challenging" for B.C. to meet its target of a 33 per cent reduction in emissions by 2020, especially with new liquefied natural gas development expected to include gas-fired electric power by that time. Options include carbon dioxide capture and storage from natural gas production, and the gas industry purchasing offsets to make up for extra emissions, he said.

One sign that the carbon tax is working as intended is that people are twice as likely to buy a hybrid vehicle in B.C. than in Canada as a whole, Lake said.

The last scheduled increase in the carbon tax takes effect July 1, bringing the tax on a litre of gasoline from six to seven cents. Similar increases take effect on diesel fuel, natural gas, coal and other fuels, offset by business and personal income tax reductions to make it revenue neutral to the government as set out in the carbon tax legislation.

Finance Minister Kevin Falcon announced Wednesday that the government is seeking written submissions on the future of the carbon tax until Aug. 31. The results will be used in preparation for the budget in February.

"We are beginning a comprehensive review that will cover all aspects of the carbon tax, including revenue neutrality, and will consider the impact on the competitiveness of B.C. businesses such as the agricultural sector, and in particular, B.C.'s food producers," Falcon said.

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