Put a carbon fee on your wish list

by Graham Saunders and Kerstin Muth

Originally published in the Chronicle Journal on Monday, December 16, 2013.

On the first day of Christmas Harper gave to me . . . a fair and transparent carbon fee. 

Industrial emissions have always had consequences for human and ecosystem health.  The real costs of carbon and toxin emissions were not considered in pricing the production of goods, energy supply and transport of goods. Health care systems and other agencies – to a great extent taxpayers - have paid for some of these risks and consequences. However, this is changing.

In the early 1990s Finland, Sweden and Norway began carbon taxes. There are now 33 countries and jurisdictions such as British Columbia and Quebec in Canada that have a price on carbon. This can provide a cost-effective and easily understood means of reducing emissions.

A national “Carbon Fee and Dividend” is the goal of the Citizen’s Climate Lobby (CCL).  This organisation was founded in 2007 by Marshall Saunders in the United States and there are currently 120 chapters across North America. The Carbon Fee and Dividend places a fee on carbon-based fuels at the source - the oil and gas wellhead, the mine or the port of entry. All of the money collected is returned to citizens on an equitable basis in the form of a dividend cheque.

The CCL meet regularly with government, the World Bank and other organisations to create the political will for a sustainable climate. Last month, CCL members, including two Environment North members and a strong Northern Ontario contingent from Red Lake to Sudbury met with members of Parliament in Ottawa to discuss the merits of the CCL Carbon Fee and Dividend plan. Spokespersons met face to face with 26 members of Parliament from the Conservative, New Democratic Party and Liberal parties. In Question Period on November 19, 2013, Member of Parliament Bruce Hyer asked the Government to protect the environment and taxpayers by supporting a carbon fee and dividend.

The plan was referred to as “elegant” by one member of Parliament because it is

  • Transparent and easily understood
  • The plan does not require an extensive bureaucracy to administer.
  • A predictably increasing carbon price will send a clear market signal that will stimulate entrepreneurship and investment in the clean-energy economy.

This is not a tax as it does not generate revenue for the government.  It is revenue-neutral, i.e. all funds collected are returned to people and not diverted into general government revenue. The dividend will protect low and middle income households from increased costs.

Is this a fantasy? Actually, a similar plan is already happening in Canada. British Columbia has had a revenue-neutral carbon tax in place since 2008. According to the Economist and other observers, it has reduced fossil fuel consumption, helped the economy by creating employment and is popular with people who vote in BC.

In spite of the positive experience in B.C. and elsewhere, Harper is against pricing carbon. The Harper government did agree in Copenhagen to reduce greenhouse gas emissions from 2005 levels by 17 per cent by 2020. Their scheme is to use sector by sector regulations. However, present Conservative policies and current trends mean emissions in Canada will exceed the Copenhagen target by 20 per cent.

Regulations do not internalize the costs of carbon which means that the costs will be continue to be incurred in other ways – increased payments for damaged homes, infrastructure, health care and insurance payments as well as hardship or loss of life.  Regulations also do not stimulate the clean-technology economy as quickly as a carbon fee. 

Without a reduction in emissions to protect the climate we will likely see a disaster tax.  Australia recently introduced a national “flood levy” to help pay for the damaging impacts of floods.

For more information on the Citizen’s Climate Lobby and the merits of the Carbon Fee and Dividend plan go to citizensclimatelobby.ca  Contact your member of Parliament and let them know you support action on greenhouse gas emissions that is fair, transparent, do-able and effective.

Environment North wishes everyone a safe and happy holiday season and maybe next year there could be a carbon dividend under the tree.


Graham Saunders is president of Environment North and Kerstin Muth is a member of Environment North