Alberta Adopts Carbon Tax

November 23, 2015

Above, Exxon CEO Rex Tillerson’s remarks on a revenue neutral carbon tax from October 2009.(he’s for it, along with most of the other leading oil major execs)
Good ideas eventually get around.

Toronto Globe and Mail:

Alberta’s NDP government is imposing new curbs on emissions from the oil sands and establishing an economy-wide carbon tax in a sweeping new plan aimed at showing it is serious about fighting climate change.

The long-awaited strategy, which comes days before world leaders meet in Paris for a major climate summit, also includes a phaseout of coal-fired power generation in the next 15 years, a 10-year plan to nearly halve methane emissions, as well as incentives for renewable energy.

There are no hard carbon targets, but under the plan, Alberta’s carbon emissions will begin to fall under today’s levels by 2030.

The government promised the moves would be revenue-neutral, and all money would be reinvested in the province on such things as new technology to fight pollution and into a new “adjustment fund” to help affected families and businesses deal with the changes.

Alberta’s climate-change strategy was released only hours before Ms. Notley was set to meet with Canada’s other premiers and Prime Minister Justin Trudeau in Ottawa on Monday. That group will be headed to Paris for the summit. “Alberta is showing leadership on one of the world’s biggest problems, and doing our part,” Ms. Notley said in statement.

Ms. Notley’s six-month-old government says the lack of a wide-ranging climate policy has hampered the province’s energy industry as it has tried to persuade the United States and other trading partners to accept more shipments of crude from the oil sands.


For seven years, the Canadian province of British Columbia has had a carbon tax. It is, on its own terms, a resounding success — carbon emissions are falling even as the economy continues to grow.

Not only is it effective, but it is, from a policy standpoint, incredibly elegant:

  • It is predictable, rising according to a set schedule (though it topped out in 2012 — more on that later).
  • It is broad, covering 70 percent of the province’s emissions.
  • It is simple, levied on a relatively small number of fossil fuel extractors and importers, piggybacking on an existing tax, thus requiring almost no additional administration or enforcement resources.
  • It is revenue-neutral, offset entirely by cuts to other taxes, mainly corporate and personal income. (In fact, each year the B.C. government publishes a table showing what tax cuts were enabled by the carbon tax.)

It all sounds like an economist’s wet dream. The one substantial flaw is that the tax remains far too low to achieve the radical reductions that will be required from B.C. (and all of the developed world) by 2050. But then, that’s true of all extant climate policies.


How did B.C. pull off this policy triumph?

Research and advocacy group Clean Energy Canada had a simple but rather brilliant idea: it asked! Last fall, it interviewed 14 key figures, including some of the plan’s political architects (like B.C.’s then-premier and then-finance minister) as well as experts from business and academia who were involved in the process.

CEC has now released a report distilling what it learned from those interviews: “How to Adopt a Winning Carbon Price.” There are 10 key takeaways. I’ll list them all, but I’m only going to dig in on a couple. See the report for more (it’s short and readable):

  1. A carbon tax and a thriving economy can co-exist.
  2. You need strong political leadership to get a carbon tax in place. (Public concern about climate disruption helps, too.)
  3. Keep it simple: Design a policy that’s easy to administer thanks to broad coverage and minimal exemptions.
  4. Commit from day one to a schedule of price increases, and stick with it.
  5. Start with a low price.
  6. Revenue neutrality helps address private-sector concerns and makes the policy more durable.
  7. On the other hand, revenue neutrality doesn’t get you very far with voters.
  8. A carbon tax can’t do everything; it needs to be just one component of a full suite of climate policies.
  9. Prepare for motivated, vocal — and not necessarily fact-based — opposition. You’ll need active, engaged supporters and targeted communications strategies to counter the critics.
  10. Expect a cleaner environment, an enhanced reputation, and a thriving clean technology sector.



7 Responses to “Alberta Adopts Carbon Tax”

  1. One day closer to the time that FOX News will have to “come clean” and tell the American people that they have been lying for over 20 years about global warming.

    So when is Sean Hannity and Bill O’Reilly going to admit they have either been ignoring science….or outright lying to the American People?

    Interesting times…..

    FOX News: “Where truth and journalism are dead.”

    • Andy Lee Robinson Says:

      Lying to achieve a goal is just part of the toolkit, and their followers have no problem with that. They’ll receive kudos for having tried to hold back the tide of reality for so long for their base.

      Just about everyone knows that climate change is real and bad, but the deniers just cannot bring themselves to admit it and be dragged kicking and screaming into the real world to help solve it.

      So the charade continues, until it doesn’t and we are left to pick up the pieces.

  2. Gingerbaker Says:

    “Not only is it effective, but it is, from a policy standpoint, incredibly elegant:”

    Not nearly as elegant as simply subsidizing FF’s. A carbon tax doesn’t actually guarantees new construction of RE. It’s incredibly complicated – that list of ten things proves it.

    => And it does absolutely nothing to keep the price of RE as low as possible. And neither does it do anything to help keep RE a public commons.

    • Torsten Says:

      Gingerbaker writes: “It’s incredibly complicated – that list of ten things proves it.”

      You are as wrong as any climate science denier. The tax is incredibly simple. I know. I live in BC. The only problem with the tax is that it has not kept rising. The government was afraid to extend the annual increases because no other North American jurisdictions had implemented a similar tax and price differences might cause unexpected distortions in parts of the economy. Think about this: If the rest of the continent had done what we did in BC at the same time, or shortly thereafter, there would have been reductions in emissions on that scale. In the meantime, we could have worked on other policies too. But too many spineless politicians, or bought-and-paid for politicians, and far too many naysayers like Gingerbaker who won’t support anything that doesn’t match 100% with their ideal model, hold back any government-led progress on this issue.

      Gingerbaker also writes: ” And it does absolutely nothing to keep the price of RE as low as possible. And neither does it do anything to help keep RE a public commons.”

      That is a strawman. That was not the objective of the BC carbon tax, so saying that it doesn’t address your concern is irrelevant. While I agree with keeping the price of renewables as low as possible, and even having a sizeable portion of them in the public commons, a carbon tax is not the tool for achieving that end. So don’t reject it for that reason.

  3. Ron Voisin Says:

    I kept waiting for “Live from New York…It’s Saturday Night”.

  4. […] carbon tax in a sweeping new plan aimed at showing it is serious about fighting climate change. [30] It’s all part of a ramped up climate change plan that will also include a significant […]

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