2.25.2008 3:21 PM

How a Carbon Tax Can Cost Nothing

A Look at North America's Only Carbon Tax

A man's hand pumping gas. Tips to save gas and boost gas mileage this Thanksgiving holiday, on the heels of high gas prices.

Photo: Istock

By Dan Shapley

British Columbia residents will pay North America's first tax on carbon starting in July, but it won't cost them a dime.

That, at least, is how the provincial Canadian government has designed the tax, which will rise incrementally until 2012. It starts at about 9 cents per gallon of gas, and ends at about 27 cents.

But the $1.85 billion annual tax is about influencing behavior, not generating revenue for the government. Income and corporate taxes are to be adjusted to save people about as much as the carbon tax will cost them, and low-income residents will get $100 each, plus $30 per child.

By inflating the price of high-carbon activities, people will presumably choose alternatives, and reshape the market in the process.

The architect of North America's first carbon tax, British Columbia Finance Minister Carole Taylor, is taking a leave from government, and looking for her next challenge. We hear there are presidential candidates in need of innovative energy and economic advisers.

COMMENTS ()