A carbon tax is bad for Alberta
Yesterday, Alberta Premier Rachel Notley asserted that Canada was “absolutely” closer to a new pipeline due to her province’s new carbon tax. According to the premier, “Alberta is not the Alberta that they thought of a year ago, or two years ago, or three years ago. After years of inaction from the previous government, Alberta is now at the forefront in the fight against climate change.”
How does a carbon tax moderate climate change andlead to the construction of one or more proposed pipelines linking oil extraction activities in Fort McMurray to the Atlantic Ocean, the northern coast of British Columbia and an export terminal near Vancouver? An understanding of economics helps to answer that question.
The new carbon tax takes effect on January 1, 2017. The initial tax will be $20 per tonne, rising to $30 in 2018. According to the provincial government, the carbon tax is the key tool to help pay for a more diversified economy. Conspicuous by its absence is an explanation of how planned wealth redistribution improves the delivery of energy, the consumption of which the government is actively trying to discourage in view of mitigating global temperature changes.
Carbon is a chemical element common to all known life on our plant. It is non-sentient and does not experience gain or loss. Carbon does not and cannot pay taxes. Only individuals can be compelled to do so. The individuals to be dispossessed of their earnings with government’s new policy, and at what rate, can be clearly identified. With few exceptions, they include consumers in Alberta of diesel (5.35¢/litre), gasoline (4.49¢/litre), natural gas ($1.011/GJ) and propane (3.08¢/litre). Cutting through politician-speak: Taxing carbon means taxing people.
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