British Columbians already have a policy that is fighting climate change and helping to create secure and well-paying jobs: the carbon tax. With a few upgrades, it can be made even more effective, and it can also drive a potent investment engine that we’re calling the Better Future Fund. Here’s how:
Close the Carbon Loophole
The carbon tax is good policy but doesn’t make all polluters pay for emissions they create. There’s no incentive for companies to clean up their act. Closing this “carbon loophole” would have generated an extra $158 million in 2012/13. Every year we delay closing this loophole leaves more money on the table that could have helped us secure a better future for B.C.
Keep on Growing
Early indications suggest that the carbon tax—along with other climate change policies—is doing its job and reducing per-capita consumption of all fossil fuels. We urge our next provincial government to build on this success with additional gradual increases. We propose increasing the carbon tax by $5 per tonne of pollution, per year, for the next four years — the same amount that government increased the tax each year between 2008 and 2012.
What will this mean at the pump? Each year until 2016, the carbon tax on a liter of gas would rise by slightly over a penny; by the end of this period, we would be paying an extra 4.4 cents per litre. By 2016, assuming we close the loophole and increase the carbon tax, we’ll be generating somewhere between $800 million and $1 billion of new revenue each year. This money forms the core of our proposed Better Future Fund.
Invest In Solutions
Carbon tax revenue is presently used to reduce personal and business income taxes and give tax credits to low-income British Columbians. We don’t think the next stage of the carbon tax needs to follow the same priority, and that a portion of future revenue should be directed into a Better Future Fund. Such a fund would be managed by a neutral third party, and audited by the Attorney General of British Columbia.
Here’s how a Better Future Fund could reduce pollution, create jobs, and diversify the economy:
Better Future Community Fund: $375 million per year To improve public transit service and support clean neighbourhood energy systems and other locally proposed green solutions in urban and rural communities. Projects would reduce pollution and make all our communities better and healthier places to live.
Home and Business Energy Efficiency Improvement Fund: $25 million per year This amount would restore previous and successful provincial government energy efficiency program commitments. Our homes and businesses could be among the most energy efficient in the world. And households and businesses will save on their energy bills.
Innovation & Clean Technology Fund: $50 million per year This will help make our industries and businesses global leaders in energy efficiency and innovative clean energy technology. We can create jobs and diversify the economy. The province’s clean-tech sector now employs about 8,400 people in well-paid jobs, and is well positioned to grow.
The above investments allocate only half of the potential new revenue, leaving additional funds to protect low-income British Columbians, cut taxes in other areas, or protect trade-exposed sectors.
Sounds like a plan.