Setting price for carbon a good strategy

A levy on carbon is the right way to go, according to one environmental lobby group.

Pembina Institute

A levy on carbon is the right way to go, according to one environmental lobby group.

The Alberta-based Pembina Institute which also is an advocate for reducing fossil fuel usage favours the levy stating it provides cost certainty and takes the decision-making out of the hands of government.

“There is a clear consensus, among business and economists, that putting a price on carbon is the best approach,” said Sara Hastings-Simon, the institute’s clean energy program director.

“The alternative is direct regulations that will be far less effective. The carbon pricing option gives business the flexibility to respond and change, rather than having regulations imposed on them that can’t be anticipated or a new government could change.”

She added it’s that market approach letting business pick what they can do to reduce emissions and buy-in is more effective and less costly.

“It’s better for business to decide than it is for government to be making those decisions for them,” Hastings-Simons explained.

The fact that the levy has the support of some of Canada’s largest emitters such as Suncor and Unilever, according to Hastings-Simons, is an example this is the right road to travel.

As for consumers, the institute doesn’t deny it will hurt some, but admitted the provincial rebate will lessen the hit to those in the low and medium income categories.

“In Alberta, 55 per cent (of people) are in that category and there will be a real impact on them. You can’t wave your hands in the air and say they do not matter,” she said.

“However, the rebates ensure those people are protected and they might even provide some incentive for them to choose options that will reduce their carbon emissions.”

She suggests that as the price rises as in the federal government plan the impact will be addressed by both business and taxpayers.

“It’s important that the plans not start out at like $100, as no one would have a chance to make changes like to a home or car. It’s about enabling people to do better. Everyone prefers clarity instead of regulation,” explained Hastings-Simon.

Alberta’s official opposition, the Wildrose Party, are against the carbon levy calling it a ‘tax’ that leader Brian Jean stated last week they would repeal it if they were elected as the next government and that it would cost Alberta’s an average of $1,000 each.

Meanwhile, the only evidence the Wildrose has produced in defence of their position comes with the claim of a leaked government document from June. In it the Wildrose claim that it shows the levy would mean a drop of 1.5 per cent in provincial gross domestic product along with a decline in oil exports, a loss of 15,000 job and a $4 billion drop in household income.

However, neither the provincial government nor the Wildrose have come up with anything to back up or refute that information.

Starting in 2017, Alberta will apply a $20 per tonne price on carbon rising to $30 in 2018 while the federal government will impose a carbon floor price of $10 in 2018 that will increase to $50 by 2022.

 

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