Laser Talk: How Revenue-Neutral Carbon Pricing Alone will Spur Low-Carbon Investments
In 2018, Canada will establish a floor price on carbon pollution of $10/tonne, rising to $50/tonne by 2022. The federal government will provide a carbon pricing system for provinces and territories that do not adopt their own systems. For the carbon price to reduce emissions significantly, it must continue to rise past 2022 and reach at least $150/tonne by 2030. A simple projection by CCL Canada members shows this could increase the cost of living throughout most of the 2030's to approximately $2,000 per person per year. There are already rumblings of a populist tax revolt over the cost of cap and trade in Ontario, estimated to be about $140 per person per year. Imagine the outcry at $2,000. The clear lesson is that high carbon prices will impose unacceptable costs on consumers. CCL has always proposed offsetting these carbon pricing costs with dividends to households, i.e. being revenue neutral. However, others have opposed revenue neutrality. They want the government to invest the revenue in various ways to help the transformation to a low-carbon economy. They ask, "where else will the investment money come from?" The simple answer is that higher fossil fuel costs will spur the investment needed for this transformation much more efficiently than would government spending. Read more here. |