British Columbians who choose to go green could find themselves with a little more cash in their pockets.
On Tuesday, the province announced a revenue-neutral carbon tax as part of its 2008 budget.
The program is considered “revenue neutral” because the money gathered by the tax will be returned to businesses and individuals through tax cuts.
Starting July 1, carbon-based fuels such as gasoline, diesel, natural gas and home heating fuel will be taxed at $10 per ton of greenhouse gases generated.
This translates to an extra 2.4 cents a litre on gasoline at the pump and 2.8 cents a litre for home heating fuel.
The carbon tax rate will rise by $5 a year for the next four years so that, by 2012, the tax will have climbed to $30 per tonne of greenhouse gases generated.
The tax is forecast to generate approximately $1.8 billion over the next three years.
This extra revenue will be returned to businesses and individuals through a credit for persons with lower incomes and reductions to personal, small business and corporate income tax rates.
British Columbia is the first jurisdiction in the world to implement such a tax, according to BC Finance Minister Carole Taylor.
“But we also, in reading the literature, believe that this is where everyone is headed.”
In January, an independent advisory panel known as The National Roundtable on Environment and Economy recommended a federal carbon tax.
The panel was commissioned by the government to study ways Canada can make major, long-term cuts to the country’s greenhouse gas emissions.
However, Prime Minister Stephen Harper’s Conservative government is opposed to the idea of a carbon tax.
Environment Minister John Baird flatly rejected the idea.
The rejection of a carbon tax is the result of short-term thinking on the federal government’s part and sells Canadians short, said Green Party candidate John Streicker.
“Canadians consistently have been saying that they’re very concerned about addressing issues like climate change,” he said.
“And governments have been not listening to the people.”
Program detractors have said the tax will hurt low-income earners.
The province’s opposition parties assert the new budget does not do enough to curb industrial pollution.
“But a consumption tax means that if industry is using that fuel they will have to pay,” said Streicker.
Manufacturers that use fuel to build and transport product will likely pass that cost onto the consumer.
That’s fine, said Streicker.
“If there’s energy and greenhouse gases embodied in products, we need to know and those that take less energy should be less expensive.”
In this way, the tax causes a shift in the energy economy.
Goods trucked long distances will increase in price, making local goods a less expensive option.
“The marketplace can do good things if we use it correctly,” said Streicker.
“That’s why a carbon tax is such a smart move.”
But can the Yukon follow BC’s lead?
“I think it’s applicable to the Yukon,” said Lewis Rifkind of the Yukon Conservation Society.
“I mean, we all consume fossil fuels whether it’s heating our homes with oil or driving a car.”
A revenue-neutral tax is a great way to entice people to conserve fuel, said Rifkind.
“If you hit people in the pocketbooks they’re more likely to change their behaviour,” he said.
“This is a very good way to do it.”
“It’s quite nice to see that British Columbia is representing the values of people in their province,” said NDP Leader Todd Hardy.
“Because there’s no question about it, people in British Columbia recognize the importance of protecting the environment — often over economic activity.”
A carbon tax is something that Yukoners would support and the territorial government should be looking into, said Hardy.
“I believe people in the Yukon want to see this government lead,” he said.
“They haven’t been at the present time, they’re doing bandage programs that are legitimate but aren’t big enough to alter the way people and businesses conduct their daily life.”
Liberal Opposition leader Arthur Mitchell is wary of suggesting a program designed for a large province would be best for the territory.
“What I will say is that I commend the government of British Columbia for coming forward and taking action,” he said.
“We actually remain the only jurisdiction in Canada without a climate change action plan.”
Premier Fentie did not respond to interview requests.
However, he recently said he would not support a one per cent fuel tax increase to fund municipal governments.