BC "fee-and-dividend" program proves spectacularly successful, reduces fossil consumption by 19%

[wtmusic]

Note: this article incorrectly calls the BC program a carbon tax; it isn't. It's a true fee-and-dividend system which collects a fee on carbon-based fuels at the source then distributes all collected funds to citizens evenly at the end of a given period (in BC's case it is returned as a tax refund). This system has been enthusiastically supported by climatologist James Hansen and others.

Perhaps this news will entice John Kerry to take a fresh look at the plan. He wasn't particularly encouraging in his first meeting with Hansen, remarking, "Well, of course, you’re right, but that’s politically nonviable. … I can’t get one vote in the Senate for that." - wtmusic

"In 5 years, debates about BC’s carbon tax have generated much heat and little light, but Stewart Elgie and Jessica McClay of the University of Ottawa have just released a good effort to rectify this situation. Comparing fuel consumption (gasoline, diesel, propane, fuel oil, etc.) in BC with the rest of Canada, before and after the imposition of the carbon tax, they detect a significant change. Prior to 2008, BC’s petroleum fuel use changed in lock-step with the rest of Canada. But afterwards it fell 17.4% per capita in BC while rising 1.5% in the rest of the country. They also noted that BC’s economy performed as well or better than other provincial economies, a partial response to the much-touted argument that BC’s economy would suffer terribly because of the tax. (Stephen Harper repeatedly claims that carbon taxes destroy economies, with zero evidence in support – which some people would call lying.)

Of course, people will still argue that the BC carbon tax had no effect, or even perverse effects, and no amount of evidence will change the minds of some. But, interestingly, BC’s aviation fuels, which are not subject to the carbon tax, did not diverge from the Canadian pattern, supporting the argument that the carbon tax really did have an effect. And BC’s disconnect from the rest of the country was evident for all taxed fuels, not just gasoline; so the argument that BC’s divergence is caused by increased cross-border shopping for gasoline is not supported.

Sensible people (especially academics like Elgie and McClay) know that correlation does not prove causation. But this is why talented researchers like Nic Rivers (also at the University of Ottawa, where he is a Canada Research Chair) conduct sophisticated statistical studies in which they try to extract the influence of anything else that might have caused the BC divergence, including weather, economy, and other policies. In a not-yet-published paper with Brandon Schaufele he has found strong statistical evidence that the BC carbon tax is having an effect, already quite profound. (I will blog on this when it is released.)"

http://theenergycollective.com/markjaccard/253661/bc-s-carbon-tax-after-5-years#comment-76211

[GliderGuider]

1. This is excellent news!!!

Way to go, out there in LotusLand!

[kristopher]

2. No "ifs", "ands" or "buts", it is a carbon tax

A fee is a payment for a good or service that an individual receives. It is conceptualized around that central idea - a specific cost associated with the good or service provided to the individual is covered by payment by the individual.
What is the cost of carbon?
Since is it essentially not quantifiable in the same sense produce or grocery dry goods are quantifiable, the "fee" cannot be designed to meet the "cost" of carbon.
In point of fact the idea is to shut down carbon emissions. The tax is collected from the producer of the fuel and given to some of the persons who actually emit the carbon we seek to eliminate.

There is no legitimate basic in the meaning of the terms to stand on the position that it isn't a tax. It was called a fee to make it politically palatable.

It is the rebate to the individuals that make it politically attractive to the masses, not the semantic games. And the politically powerful people who have to pay the tax aren't fooled for a second by the verbiage - they know it's a tax.

That said, whatever we can do to raise the cost of carbon is a wonderful thing and the study, if its results are valid, is great evidence for carbon tax policies.

[muriel_volestrangler]

5. True, and it's not a 'dividend' either, according to the definition the OP uses

But I'm fine with a carbon tax.

The OP picture claims:
"Dividend: Equal Shares to all Legal Residents"

What BC has actually done is:

The fact that the BC carbon tax--like its older European counterparts–has not had an overall adverse economic impact can be traced in large part to the use of a tax shift. The increase in carbon taxes is to be matched by an equivalent reduction in other taxes; so the aggregate result is no overall increase in taxation or government revenues. Specifically, in BC the carbon revenue is being used mainly to reduce the corporate income tax rate (for both small and large businesses), and the two lowest personal income tax rates by 5%. It is also being used to fund a low-income tax credit and to provide a rebate up to $200 for northern and rural BC homeowners.

http://www.sustainableprosperity.ca/dl872&display

[joshcryer]

6. The tax reduction and rebate *is* the dividend.

edit: from your link:

The BC government has kept its promise to make the tax shift ‘revenue neutral’, meaning no net increase in taxes. In fact, to date it has returned far more in tax cuts (by over $300 million) than it has received in carbon tax revenue – resulting in a net benefit for taxpayers. BC’s personal and corporate income tax rates are now the lowest in Canada, due to the carbon tax shift.

Wikipedia:

Fee and dividend is a revenue-neutral mechanism designed to impose a progressive fee on carbon emissions and return the fee to the public, which has been proposed as an alternative method of reduction in fossil fuel use to cap and trade, carbon tax or emissions trading mechanisms. This mechanism is designed to maintain economic function while encouraging transition to a sustainable energy economy while simultaneously reducing CO2 emissions.

http://en.wikipedia.org/wiki/Fee_and_dividend

BC has got more revenue because people actually implemented the CO2 reductions which prove to be a net positive economic effect since CO2 emissions are objectively a net negative.

[muriel_volestrangler]

9. But it's not the "equal shares to all legal residents" that the OP claims

It is a variety of tax cuts and credits, with where they live in the province making a difference, for instance.

I understand that some people want to avoid the word 'tax', because they think it will be politically easier to pass something if it isn't called a 'tax'. But kristopher is absolutely correct - this is a tax, because it is levied at a given rate, and there is nothing obtained in return for it. The Wikipedia entry gives just one example of 'fee-and-dividend' - this one - and what do we find at the BC gov link it uses?

B.C.’s Revenue-neutral Carbon Tax

http://www.bcbudget.gov.bc.ca/2008/default.htm

And nothing in the details about it being a 'fee' - it is consistently called a 'tax'. It's a revenue-neutral tax (well, designed to be revenue neutral - as you point out, revenue has actually decreased, probably because carbon consumption has decreased faster than expected), and it's using tax-shifting, not a dividend:

One option is direct distribution of carbon tax revenue via “dividends.” Climate scientist Jim Hansen calls for all carbon tax revenue to be returned to citizens in an equal, monthly “green check.” A worthy alternative, which Al Gore and many economists advocate, is “tax-shifting” — use carbon tax revenues to reduce regressive taxes such as sales taxes and payroll taxes. (See our Issues page, Managing Impacts.) British Columbia has enacted and annually increased its revenue-neutral carbon tax with popular support by dedicating all revenue to reducing a variety of other taxes ranging from sales taxes to business taxes.

http://www.carbontax.org/myths/

[joshcryer]

10. I think fee and dividend is a tax too.

It's just a tax that's revenue neutral. I think who gives a fuck?

[muriel_volestrangler]

11. It seemed important to the thread starter, whose comment was mainly about how it's not a tax (nt)

[joshcryer]

12. I don't think it should be called a tax.

Because it has a dividend which most taxes don't have.

[joshcryer]

7. BS this is your worst nightmare.

It means that your fancy subsidized technologies that aren't doing squat about climate change will actually have to compete.

[drm604]

3. Unfortunately, I think John Kerry is correct.

This would not be politically viable under the current US Government. Most Republicans don't even believe that there's a need to reduce fuel consumption, so why would they vote for this, or even allow it to come to a vote?

[wtmusic]

4. Barbara Boxer and Bernie Sanders co-sponsored a F&D bill in February

Of course the House killed it, but it's come a long way in just three years, and continues to gain momentum (as Republicans lose it).

[joshcryer]

8. You're absolutely right, the dividend doesn't have to be a cash payment.

As long as its revenue neutral, which BC's is, it can rightly be considered fee and dividend.