Canada Announces Carbon Fee and Dividend

October 24, 2018


Toronto Globe and Mail:

Prime Minister Justin Trudeau took his climate-change battle to Ontario Premier Doug Ford’s backyard on Tuesday, unveiling a carbon-tax plan that would see 80 per cent of households in the province financially better off as a result of annual rebates to be paid in the spring.

Mr. Trudeau announced details of the program during a speech at Toronto’s Humber College − located in Mr. Ford’s riding − where he argued that the price on carbon emissions is a critical part of Canada’s commitment to the international effort to combat climate change and its dire impacts on people and the overall environment.

With an election due a year from now, the Liberal government is facing concerted attacks by Mr. Ford, federal opposition Leader Andrew Scheer and other conservative politicians across the country over the imposition of a carbon tax that they say is too burdensome and will do little to address global climate change.

The federal levy will apply in four provinces − Ontario, Saskatchewan, Manitoba and New Brunswick − whose governments have declined to adopt their own plans for carbon pricing. Canadians elsewhere will be covered by provincial plans, either a direct tax or cap-and-trade system, and those governments must determine what to do with the revenue.


Ottawa estimates that the average Ontario household will pay $244 in direct and indirect costs next year, and will receive $300 under the “climate-action incentive,” for a net benefit of $56. In Saskatchewan, the average family would pay $403 in carbon-tax costs and receive $598 in rebates. In Manitoba, the costs will be $232 and the rebate $336. In New Brunswick, the breakdown is $202 and $248.

The amounts vary from province to province because each jurisdiction has a different reliance on fossil fuels, and therefore a different amount of revenue per person that will be generated from the tax. The payments in each province − which will increase as the price per tonne rises − will be based on the number of people in a household and paid to one tax filer. Washington State..

Seattle Post Intelligencer:

The petroleum industry has set a fundraising record in Washington initiative battles, having taken in $25.87 million in its campaign to defeat Initiative 1631, which would impose a carbon fee on emissions from the state’s major polluters.

A $3 million boost in spending is largely due to an influx of cash from BP America, one of the major oil companies operating refineries in the state. Phillips66, formerly the led donor, has given $7.20 million, followed by Andeavor (the former Tesoro) at $4.3 million.

Supporters of the carbon fee have raised over $12 million, or half of what Big Oil has put into defeating the measure. Its backers include businesses such as Microsoft, the American Lung Assn., Gov. Jay Inslee, environmentalist and labor leaders.

The latest infusion to the “Yes” side is a $1 million donation from former New York Mayor Michael Bloomberg. Microsoft cofounder Bill Gates has donated $1 million.

The “No” campaign has spent more than $94,000 on polling with Moore Information, the Northwest’s leading pollster for Republican candidates. It has paid $106,870 to Communication Analytics for “Ad Testing,” testing TV pitches.

The most-aired No-on-1631 TV spot features former state Attorney General (and 2012 Republican gubernatorial candidate) Rob McKenna. The spot has McKenna talking about consumer protection. It does not mention that he is now an attorney for Chevron.


What it means: A “yes” vote would impose a $15-per-metric-ton-of-carbon fee on large emitters of greenhouse gases starting Jan. 1, 2020. That fee would increase by $2 each year until Washington meets its 2035 greenhouse gas reduction goals and is on target to meet its 2050 goals.

The money would fund programs aimed at reducing pollution in the air and water, addressing climate impacts and encouraging clean energy usage. A public oversight board would “supervise revenue expenditures.”

The Washington Office of Financial Management said the fee would raise more than $2 billion in the first five years.

Who’s for it: Clean Air Clean Energy Washington, a coalition of businesses, tribal groups and environmental organizations, has spent $2.6 million supporting the initiative, according to the Public Disclosure Commission. The coalition has raised more than $8 million, with most of its contributions coming from conservation and environmental groups.

Yes on 1631 touts the endorsements of dozens of businesses, renewable energy groups, unions, Native American tribes, churches and health care groups like Planned Parenthood and the American Lung Association.

Advocates of the measure describe it as a “practical first step to ensure clean air and clean water for everyone in Washington,” and say it would “protect our health, build new good paying jobs, and ensure a cleaner future for the next generation.”

Who’s against it: No on 1631, sponsored by the Western States Petroleum Association, has spent $2 million fighting the initiative, according to the Public Disclosure Commission. The group has received more than $21 million in donations, mostly from various oil and petroleum companies. Top contributors include Phillips 66, BP America, Andeavor, Chevron and Valero.

Notably, Shell’s top executive said he supports a price on carbon and would not spend money opposing the initiative, but cannot support it either. In an opinion column in The Seattle Times, CEO Ben van Beurden said the initiative has flaws, like failing to place a fee on coal emissions or a tax on out-of-state carbon imports.

The Association of Washington Businesses has raised $14,500, mostly from petroleum companies, and has spent $500 opposing the measure.

Other critics, like The Tri-City Herald Editorial Board, contend the initiative would unfairly increase consumers’ and small businesses’ gas and electricity prices, and exempts too many of the state’s polluters.


18 Responses to “Canada Announces Carbon Fee and Dividend”

  1. Gingerbaker Says:

    Finally! Free money to spend on gasoline and natural gas! Everybody wins!!

    • greenman3610 Says:

      One would not, say, drive to work twice in one day just to spend extra money.
      Data shows that when incentives like these are applied, fossil fuel burning goes down.

      • Gingerbaker Says:

        The data is fatally flawed on CT’s according to the NREL itself. And even then most of the data shows little or no effect.

        And when it has a little effect, the effect is merely a small temporary dip in FF use, because of the regressive austerity these tax schemes produce in most of the places they have been tried.

        Yet in this particular case, they have mandated the complete perversion of conservation. Please notice – they actually brag about the fact that the vast majority of people will be getting more money than they have paid in carbon tax.

        In other words, most people will be making a profit on their fossil fuel use. Do you think they will tend to use more, or less, fossil fuels once they get the hang of it?

        How, in your opinion, does that result in more RE being built and deployed? Because THAT is the only metric that matters.

        • Not sure what NREL study you’re referring to, Gingerbaker. I found this one, from March this year:

          Click to access 70282.pdf

          Here’s a quote from it (p. 16):

          ‘By 2050 emissions are reduced by 22.7% relative to the reference under the $25 @ 1% tax pathway and by 51.1% under the $50 @ 5% tax pathway.’

          The reference is no carbon tax. The $ figures are the initial rates, and 1% and 5% refer to the annual rate of increase.

          These are not small reductions. Also, wind and solar power see hefty increases under these carbon tax scenarios – see Appendix, Table A2 for the projected growth, all in the hundreds of percent relative to no tax.

          • J4Zonian Says:

            By 2050 the world is going to be suffering constant disasters and political upheaval; tens or hundreds of millions will be on the move because of climate and conflict. It will be far too late for us to reach those numbers.

            We need to reduce fossil fuel use by at least 90% in the next 7 years and the rest soon after, at the same time we sequester massive amounts of carbon by reforesting the world and transforming chemical industrial agriculture into small-scale low-meat organic permaculture. A carbon price can’t possibly do all that alone, and if we do all the things necessary to accomplish that, through the necessary government action, a carbon price will be nice but not necessary. A low carbon price is almost useless; the range of usefulness is from $50 a ton up past $100, and what’s being voted on and considered now is in the range of $15, going up far too slowly to mean anything until it’s too late. Trying this and having it not be enough is almost certain but we won’t have absolute proof that’s it’s too little until it’s too late to do anything real.

            People talk about what’s politically possible and thus end up talking about a carbon price as the stupidest common denominator, (1) but an emergency climate mobilization is what will physically and ecologically prevent the collapse of civilization and the extinction of millions of species. We have to change what’s politically possible to fit reality; it doesn’t work the other way around.

            (1) A carbon price, like nukes, is a bribe to get Republicans to accept the science of climate catastrophe, but the Republicans in charge have no interest in compromising, or anything else that will solve the problem. They want to destroy the Democrats, the left, and the world, and won’t stop working toward that, ever, until it’s done. We need to remove them from power.

            See David Roberts, “Why conservatives keep gaslighting the nation about climate change”

          • dumboldguy Says:

            Sounds like Jeffy is coming around to rational fatalism. Will he take his own advice and off himself to help reduce mankind’s heavy footprint on the planet? Or will he continue to deny reality and continue his “bargaining” by spouting bright-sided BS like “…take the thousands of other actions needed for a systematic, conscious transition to the kind of society….” (???—didn’t quite finish that sentence, Jeffy)

          • Gingerbaker Says:

            “Not sure what NREL study you’re referring to, Gingerbaker. I found this one, from March this year:


            You found a paper that is not a study. It is a computer simulation, a prediction. Likely based on a ton of previous studies that claimed successful implementation of a carbon tax that were methodologically fatally flawed.

            Like I keep saying. Almost all actual studies of the effect of CT’s suck, because they simply ascribe short-term dips of FF use or FF emissions to a carbon tax without doing the hard work to prove that these dips were actually a result of the CT and not due to other causes. This should be a scandal, but it is hard to scandalize the zeitgeist. The majority of people believe in this meme that the CT is an idea which is the best thing since sliced bread. That it is pretty much a complete failure according to real-world results is something most people do not want to hear and simply do not acknowledge.

            Right now I could give you about 20 references on the failure of carbon taxes all around the world. But the comment would not pass the filter here.

            In the meantime, here is the NREL statement and report I mentioned:

            Here is the NREL report discussing the lack of proper rigor of CT analyses and the poor performance of them around the world.:

            [page 23]

            “Efforts to evaluate the effectiveness of existing carbon taxes have been limited. Some studies assessing carbon emissions levels in countries that instituted taxes in the early 1990s show overall GHG emissions reductions, with some as high as 15%. However, these studies have generally not attempted to account for the impact of other carbon mitigation policies. Most
            recently implemented carbon taxes emphasize evaluation and estimating impacts, but their effectiveness remains to be seen. ”


            Just so you know, there are plenty of places around the world (including the United States) that during the exact same time frame as the CT studies that showed “emissions reductions, with some as high as 15%”, with similar or greater carbon emissions reductions. And these places had NO carbon tax in place.

            There are a zillion reasons why GHG emissions can go down in the short-term. The economy took a dip. Or the population moved. Or a large business went under. Or the price of gasoline soared. Or people installed LED’s or new furnaces, or the percentage of higher-mileage cars increased, etc etc etc etc.

            Almost all CT ‘studies’ did not look for any of things to correct their calculations. And, as the NREL says, when they used better methodology, other studies showed no effect of the CT.

            We should be skeptical as hell about carbon taxes.

            Here is my comment as Roger Lambert, my real name, at another forum. (You can see the pushback I get on this. Some a-hole there accuses me of being a climate denier and a liar)

            But the links to the articles about CT failures or unimpressive results are there for you to see :


      • dumboldguy Says:

        Data shows that when incentives like these are applied, fossil fuel burning goes down.

        I must have missed that (or CRS strikes again). Got some citations for that?

        • Gingerbaker Says:

          1) Fossil fuel burning has also gone down in LOTS of places that did not have carbon taxes.

          2) And the data also shows that more times than not, fossil fuel did not go down where carbon taxes have been tried.

          3) Also, the data that shows that when fossil fuel burning DID go down where a carbon tax was in place, it was taken at face value that the carbon tax caused the reduction in fossil fuel use, and was not merely associated with it. Plenty of ‘studies’ like that.

          There has never been , to my knowledge or that of the NREL in its (I believe) latest review paper, a single study of the efficacy of a carbon tax that has even looked for proof that any reduction in fossil fuel use was actually due to the carbon tax and was not, in fact due to all sorts of other factors.

          We need only look at my point 1) to see the flaw in that approach.

      • rhymeswithgoalie Says:

        Do these cap-and-trade or carbon fees apply to imported goods? Asian factories can have the nastiest power sources.

  2. Hi Gingerbaker. Bear in mind that pricing the carbon content of fossil fuels, as in this carbon tax the Canadians have passed, puts fossil fuels at a disadvantage to everything else on the market.

    So, yes you can continue to spend the dividend on those now more expensive products. Or save money, if you spend it on anything else. Buy a more efficient vehicle, and you are a winner. Products which use a lot of fossil fuels (meat, plastics, lawn chemicals) get more expensive? Buy less of them. Find a substitute.

    Gasoline and natural gas also get more expensive, by the way. So people will buy less of them, too. For the climate that’s a big deal.

    Thanks Canada!

    • J4Zonian Says:

      Buy a more efficient vehicle that’s not an EV, and you lock in fossil fuel use for years longer and wastefully create a stranded asset for society to deal with after. A carbon price, especially an incredibly low one like this, will 1. do very little and act very slowly, and 2. will affect coal first. Thus it actually is likely to increase gas use at least, maybe oil, unless other laws are passed to prevent that. Like a rapid phaseout of ICEVs at the same time huge amounts of RE are added to its grid.

      We’ve waited so long to do anything, incremental change is no longer enough. Canada, whose grid is already 60% (dispatchable) hydro and 6% wind, also has tremendous potential for more wind in a large swathe across the middle, offshore wind on each coast, a fair amount of solar, and the money to do whatever it wants, along with vast expanses of land and low population. It has phenomenal potential for efficiency, (Electrification, high speed rail network, eg.) so it can reach 100% RE faster and more easily than almost any country in the world.

      Since Canada’s one of the highest per capita energy users in the world, it’s criminal for it to not simply decide to do it all now just by deciding. Instead, it’s wasting time going through this superfluous bargaining phase of mourning, trying to change everything as fast as possible by keeping everything the same as long as it can. Trudeau’s $15, rising $2 a year, will take something like 30 years to reach a level of change we need to reach in the next 3 if we want to avoid catastrophic changes later this century. We need Canada to implement a crash mobilization at the same time we in the US do–right now.


    • Gingerbaker Says:

      “Hi Gingerbaker. Bear in mind that pricing the carbon content of fossil fuels, as in this carbon tax the Canadians have passed, puts fossil fuels at a disadvantage to everything else on the market.”

      Hi back! 🙂

      Here is the rub:

      We can also put “fossil fuels at a disadvantage to everything else on the market” by making everything else cheaper than fossil fuels, rather than making FF’s more expensive than they already are today.

      What we are trying to do is NOT to drop fossil fuel use a little bit. What we need to do is to make FF’s irrelevant. In the real world, that means building and deploying new machines that use electrons instead of carbon.

      But these machines (EV cars, heat pumps, solar and wind farms) cost money. Take an EV or PHEV car for example. It is, even with today’s rebates, significantly more expensive than the ICE alternative. People can’t afford that, so they keep their ICE cars on the road. We are at record longevity of the age of the average car right now. If gas goes up, they have that stranded asset – they must bite the bullet. We have data on this – a few years ago in the U.S. gasoline hit $5.00 a gallon for regular. And people did not switch to EV’s or even hybrids. What does that tell you about the possibilities of success of a carbon tax?

      But we know what DOES have a real effect on people’s decision process: Targeted subsidies for renewable energy. Take subsidies away, and people buy even fewer EV’s, heat pumps, new furnaces.

      What we need to do is increase subsidies for RE until we see the movement we need. If a PHeV or full electric car had enough subsidies to make them less expensive than the equivalent ICE version, we would see rapid uptake.

      • J4Zonian Says:

        There are lots of market religion things we can do: remove fossil fuel subsidies and externalities; increase subsidies for efficiency, wiser lives, and renewables; put a price on carbon… and if we do all of them we might come somewhere near the realm that includes being remotely close to making change at the speed we need to. We can also admit that the conservative obsession with competition and license is a major cause of our problem and use something else to solve it.

        Something like the power of cooperative action under the umbrella of democratic government. We can mandate a phase-out of ICEVs and fossil fuels as we coordinate the build up of clean safe renewable energy across the country, revitalize the rail system and build a network of high speed rail to give people pushed by the changing relationship of prices, and take the thousands of other actions needed for a systematic, conscious transition to the kind of society.

        • J4Zonian Says:

          “…that will survive.”

          Sorry, lost it transferring the post.

        • Gingerbaker Says:

          I agree completely. We have seen the results of 30 years of hoping the free market is going to solve this on its own. It has not, we are headed like a bullet for catastrophe.

          The carbon tax (whatever that means? – there are 1000 proposals which differ like night and day) can be seen as some sort of fever dream silver bullet which supposedly “solves” the problem of AGW so painlessly that even Republicans might be inclined to pass the legislation.

          But solving AGW will NOT be painless. There are trillions of dollars worth of new electron machines to buy and build and deploy. Only then can we start to save trillions on FF costs, and quadrillion in adaptation costs. It’s all upfront costs and then gravy.

          It is going to cost money to solve AGW. We need to embrace that. We also need to spend wisely, efficiently, on a strict timetable, and in the most intelligent way possible.

          This is exactly contrary to the design of all carbon taxes. There is virtually no attention paid to how and when and where and who is going to pay for, design, deploy the RE we all agree we need. None. It’s all just going to occur by magic. The carbon tax Fairy is going wave her magic wand and solar panel farms and wind farms and heat pumps and EV cars and trucks are all going to pop up out of the ground like delicious sparkly mushrooms that nobody has to worry about or even pay for. All the paying for stuff is evidently still just left to the the Magic of Free Enterprise. Which is going to kill us all.

          Meanwhile, targeted RE subsidies directs actual government moneys exactly where they should be needed – paying for RE machines. They can be spent “wisely, efficiently, on a strict timetable, and in the most intelligent way possible”.

          What a concept – spending real money on real improvements, with money derived in an egalitarian manner!

          And yes, all this could and should be part of a system of government mandates that enhances the efficiency, fairness, and cost-effectiveness of our national investment in clean energy.

          The exact opposite of the unproven nebulous pie-in-the-sky free marketism of the carbon tax.

          • J4Zonian Says:

            Yup. Also, they’re generally talking about developed countries, where CTs and other market religion strategies will help the slowest. Countries that emit the most have saturated electricity markets and adding new energy is a zero sum game with existing energy. With increasing efficiency it’s even more of a dog fight.

            In developing countries there are still people without electricity or with too little, so renewable energy can move in without forcing out something else. As owners realize new RE is less than even old fossil and fissile fuels, it will happen, but there’s resistance to stranded assets slowing adoption of RE. To be fast enough to save civilization it has to be done by government mandate. Oh horrors! Creeping socialism! And drat! Capitalism turns out to be the problem! Maybe we can keep avoiding that realization for a little while longer if we all just close our eyes and pretend.

  3. Reblogged this on groundswell bass coast climate change renewable energy and commented:
    Great news Canada adopting fee and dividend as price on carbon. This means power stations(and other big consumers of fossil fuel) the tax office as they generate emissions. This is then a cost component on your electricity bill but you get reimbursed when you submit tax return. Tony Abbott screamed that this is a tax rip off. But money from power stations is separate from consolidated revenue, so, by definition, when users are even reimbursed, it’s not a tax. Even senior Republican Party people like it, a way of capitalising renewable energy projects, without tax, or big finance, or government intervention with big business. Just what we need in Australia.

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