EnviroEconomics.ca

…environmental economics and the implications of environmental policy

The Manitoba Carbon Tax two step…

without comments

Design matters. Just take a look at Manitoba. The government’s April 09, 2008 budget introduced a carbon tax on coal of $10/tonne starting in 2011. The casual observer, depending on their particular bias would say either: it is not enough; it is a good start; or why introduce another punitive tax? So, which is right? Well, none actually.

Coal accounts for about 1.3% of all energy consumed in Manitoba, 80% of which is in the electricity sector. For the province, coal totals about 2% of all energy and 7% of all carbon emissions from energy. So, at best a low carbon price will be targeted at about 7% of all emissions.

And oh did I mention the following (see here)

The decision comes as Crown-owned Manitoba Hydro prepares to phase out its last coal-fired electrical plant in Brandon.

So, I suspect we are seeing the emergence of the carbon tax coming full circle on the political acceptability front. Indeed our baby is growing up. It is taking its rightful place amongst other notable ineffective Canadian climate polices such as voluntary inaction, soft cap and rule (a description of the current federal cap and trade plan) and now the great disappearing carbon tax.

Which is why, as we all know, design matters but political will rules. Sure we can debate cap vs tax, allocations or revenue recycling design, but political will sets stringency. Period. So, without a push from the electorate, or that sudden and rare political epiphany as in the case of BC’s Premier Gordon Campbell, inaction will continue to define Canadian climate policy.

Drink anyone?

Written by Dave Sawyer

April 10th, 2008 at 1:33 pm

Leave a Reply