North America's first carbon tax rolls out under fire

Fri Jun 27, 2008 5:32pm EDT
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By Allan Dowd

VANCOUVER, British Columbia (Reuters) - Civic leader Scott Nelson says he is as worried as anyone about global warming, but that does not make him happy to be one of the first North Americans to pay a carbon tax to curb climate change.

Nelson, the mayor of Williams Lake, British Columbia, says record high energy prices mean that the levy, for all its good intentions, could not come at a worse time for residents in his community, a small lumber and ranching town about 525 km (340 miles) north of Vancouver.

"The last thing they need now is a tax on top of these soaring prices to add insult to injury," said Nelson, predicting that a taxpayer revolt will eventually scuttle the new tax, which takes effect on July 1.

Carbon taxes already exist in Europe. But the tax on fossil fuels will make the Pacific province of British Columbia the first North American jurisdiction to bring in a broad-based levy designed to cut emissions of the greenhouse gases that are blamed for global warming.

Quebec has a limited carbon tax that applies to energy firms.

The British Columbia government unveiled the tax in February, calling it a key element in a pledge to cut greenhouse gas emissions by 33 percent by 2020.

The tax applies to nearly all fossil fuels, including gasoline and home heating fuel, starting at C$10 per tonne of carbon emissions in 2008 and increasing by C$5 a tonne annually for the next four years.

For drivers, that will mean an additional 2.41 Canadian cents on a liter of gasoline (about 9.13 cents per U.S. gallon), starting Tuesday. The current gas price in Vancouver, British Columbia's biggest city, is around C$1.40 a liter.   Continued...