How to carbon proof your wallet

It looks like a carbon tax will be one of the big issues in the upcoming territorial election. Last week Premier Pasloski said he would fight likely federal plans for a national carbon-pricing program that would include the Yukon.

It looks like a carbon tax will be one of the big issues in the upcoming territorial election. Last week Premier Pasloski said he would fight likely federal plans for a national carbon-pricing program that would include the Yukon. The other territorial premiers and Premier Brad Wall of Saskatchewan have also come out against the idea.

Meanwhile, Liberal leader Sandy Silver wants the Yukon to acquiesce to the national Liberal carbon-pricing scheme, and try to negotiate with Ottawa to make sure it is revenue neutral and that the money stays in the Yukon.

The NDP are also in favour of a carbon tax, and want to see it offset by a refundable tax credit for lower-income earners.

While the political drama unfolds on the public stage, you might be asking yourself how you too can contribute to fighting climate change. Or, in the back of your mind, you might be asking how you can protect your wallet from whatever scheme our leaders end up implementing.

Fortunately, the answer to both these questions is the same. If you can reduce your carbon emissions, you help the planet and save your wallet.

Most conversations about carbon taxes start with energy-efficient light bulbs and fuel-efficient cars. Those are important, and we’ll get to them in a minute, but let’s remember that your carbon footprint is driven by some much more fundamental decisions.

And keep in mind that a “revenue neutral” carbon tax is neutral on average. That is, if the Yukon government takes in a million bucks in carbon tax revenue, it will reduce other taxes by a million bucks. But it is very unlikely to be revenue neutral for you. You may win or you may lose, depending on how much fossil fuel you burn and what other taxes you pay.

The first thing to think about is your line of work. If you’re a placer miner and drive a Caterpillar D9R with an 889-litre diesel tank, you’re going to pay a lot more carbon tax than a web-page designer who bikes to work in Whitehorse. Ditto if you run a trucking or contracting business driving long distances to the communities compared to a delivery or landscaping service in the capital city.

I’m not saying that all placer miners should become web-page designers. Placer mining is way too much fun for that. But unless you can figure out how to pass on the extra carbon tax to your customers, your income is going to take a hit. When you make decisions about what kind of business you do, you should factor this in.

The next big strategic decision is your house. If you live in a big, rambling 1970s-era country-residential home that’s insulated like swiss cheese, you’re inevitably going to end up paying more than if you live in a modern downtown condo within walking distance of work. You’ve got more square feet, higher heating cost per square foot and commuting costs on top.

A quick look at just the commuting costs gives you an idea of the dollars involved in your housing decision. Assume your commute is 25 kilometres and you work five days a week, 50 weeks a year. Based on data from Statistics Canada and Natural Resources Canada, if you’re driving a 2016 Prius then you’ll burn 588 litres per year and pay $681 for your commute. A ten-year old Ford F-150 4X4, on the other hand, will burn 2075 litres and cost $2404 per year.

With a carbon tax at $30 per tonne or 6.7 cents per litre, which is the BC rate, the downtown-living condo dweller would pay $0 to walk to work. The Prius driver would pay $39 and the F-150 owner $138 per year.

If, as many economists expect, carbon taxes will need eventually to rise to the $100 per tonne level to really change people’s behaviour, you can basically triple the amounts above.

After you’ve chosen your line of work and where you live, then we get to lights, insulation and more tactical fixes to your carbon plan.

The Yukon has some great programs that you should think about taking advantage of. On lighting, the new LED lights have improved dramatically in the last few years. Putting one in your living room no longer gives you the impression you’re sitting in a Mars space station. They also use less than a quarter as much energy as the old incandescent bulbs. I talked to one downtown business who thought the initial costs of the bulbs had been paid off by lower power bills in less than two years.

Even better, if you go to inchargeyukon.ca you can find out how our two electrical companies will pay you $7 per package of bulbs. They also pay $10 for block heater timers. Unless you drive around a lot at 2am, you probably don’t need to pay to heat your engine block at midnight.

The Yukon Energy Solutions Centre has a wide range of programs that divert a small part of our transfer payment into your pocket if you buy energy-efficient appliances, water heaters or home insulation. They also subsidize home energy assessments. I got one done, and found that my home, built in 1952, had so many holes that they added up to a 1547 cm2 hole in the wall. That’s like leaving a medium-sized window open all winter.

And my house was rated “average” for the Yukon. Half of the people reading this column have even less well-insulated houses.

What I learned researching this column is a carbon tax gives me an incentive to use less fossil fuel. If I use one litre less, I save six cents (using BC’s tax rates). But, even more importantly, I save $1.15 on the fuel itself.

So no matter what happens in the election, you might as well start carbon-proofing your lifestyle now.

Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. He won last year’s Ma Murray award for best columnist.

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