Wednesday, October 31, 2018

Carbon Fees Take Center Stage in Washington State & Canada

Money (Credit: Click to Enlarge.
Initiative 1631 In Washington
In the state of Washington, voters will have an opportunity to approve a plan that would put a price on carbon emissions, albeit a fairly modest one of $15 per ton starting in 2020.  The fee would ratchet up $2 a year until the state’s 2035 carbon reduction goals are met.  According to the New York Times, the measure — known as Initiative 1631 — would generate $2.2 billion in revenue in the first 5 years. It would raise the price of a gallon of gasoline by about 13 cents, an increase that would cost the average motorist in Washington $10 a month.

The money raised would be used to help the state transition to a low carbon economy.  It would pay for more electric buses and promote renewable energy initiatives.  Part of the money would also be used to shield low income residents from increases in their utility bills.

The fossil fuel industry is foaming at the mouth over this proposal.  Although the actual money involved is modest, big oil companies like Chevron and BP have poured more than $25 million into opposing the initiative.  They are scared that it might set a precedent for other states to follow, and hopefully it will.  Initiative 1631 is nothing more than an attempt to level the playing field by correcting a distortion in the current economic equation.

Canada Enacts A Carbon Fee
Last week, Canada also imposed a fee on carbon emissions.  It starts at $20 a ton in 2019 and goes up $10 a year until it reaches $50 a ton.  (Many economists put the social cost of carbon at around $130 a ton.)  Canadian provinces are split on emissions policy, with British Columbia being strongly in favor and Alberta — home to the infamous tar sands — being strongly opposed.

According to The Guardian, the plan will hike gasoline prices by 42 cents a gallon, double the price of coal, and raise the price of natural gas by 75%.  Those increases should exert leverage on the choices Canadians make when it comes time to purchase a new car.  They will also strongly influence the decision’s Canada’s utility companies make when it comes to keeping existing generating plants in operation or investing in new generation facilities.  The new government policy is expected to give a significant boost to renewable energy.

Read more at Carbon Fees Take Center Stage in Washington State & Canada

No comments:

Post a Comment