its high time for carbon incentives

The idea behind a carbon tax is to put an additional cost onto fossil fuels. The concept is that since the fossil fuel is now more expensive…

The idea behind a carbon tax is to put an additional cost onto fossil fuels.

The concept is that since the fossil fuel is now more expensive consumers will look to alternatives.

Fewer fossil fuels being consumed means fewer greenhouse gases being released and thus the impacts of future climate change can be reduced.

As an example, assume a carbon tax is applied to home heating oil.

With the increased price, householders would look at reducing the amount of oil they purchase by insulating their homes better.

They would also look to cheaper heating alternatives, such as switching over to wood or electricity.

In either case, the amount of greenhouse gases caused by home heating is reduced.

British Columbia has a provincial carbon tax system, and the federal Liberal Party is advocating a somewhat similar, but not identical tax should it become the national government.

An interesting aspect of both these tax plans is that they are promoted as being revenue neutral.

All monies collected are eventually refunded to taxpayers through the lowering of other taxes.

But here’s the rub. Individuals are not refunded by the amount of carbon tax paid.

If an individual uses a lot of fossil fuels they pay a lot in carbon taxes but will not see an equivalent lowering of their other taxes.

An individual who uses minimal fossil fuels will pay less carbon tax but receive more back in the form of lower overall taxes.

Good environmental behaviour is finally financially rewarded.

This might be considered all well and good in hippy-trippy British Columbia or on the benches of the Official Opposition in Ottawa, but what about the Yukon?

In the Yukon, the opposite is true.

There is actually a program that provides an incentive to use fossil fuels.

Called the Fuel Tax Exemption program it is in aid of off-road commercial purposes.

This includes mining, logging, outfitting, trapping, fishing, hunting, tourism, and the generation of electricity.

Basically, the purchaser of fuel for these purposes doesn’t have to pay the Yukon tax of 7.2 cents per litre for diesel, 6.2 cents for gasoline, and 1.1 cents for aviation fuel.

That is right. Cheap gas for being a back-country business.

This financial subsidy has the unfortunate effect of encouraging a form of energy use that is causing climate change.

It also does not encourage the use of alternatives.

If a Yukon placer miner or back-country lodge operator wants to install a solar-power system to provide electricity the Yukon government provides a short-term financial disincentive to not do so.

That Fuel Tax Exemption only applies to fossil fuels, it does not apply to energy created by other means.

There is no subsidy for solar panels, or micro wind-turbines. Only for oil.

The government is essentially paying certain businesses to burn fossil fuels.

Energy is energy, and if the government is serious about encouraging alternative energy it must stop subsidizing fossil fuels.

Now there is debate about whether a carbon tax will actually reduce overall emissions.

And there has been discussion that such taxes will adversely affect rural and northern Canadians more than their southern counterparts.

But if the Yukon is serious about reducing greenhouse gas emissions from fossil fuel consumption, at the very least lets not financially encourage their consumption.

Let us get rid of the Fuel Tax Exemption.

It would be a good starting point for a discussion about whether a carbon tax would be appropriate or not for the Yukon.

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