The Pembina Institute today applauded Opposition Leader Stéphane Dion's commitment to implement a broad-based carbon tax that would reach $40 per tonne of greenhouse gases in its fourth year.
Environmentalists, business organizations and economists widely agree that putting a clear price on greenhouse gas pollution - whether through a tax or a "cap-and-trade" system - is a crucial part of any credible climate plan for Canada.
"Mr. Dion's proposed carbon tax is a good example of the kind of policy Canada needs to fight climate change," said Marlo Raynolds, Executive Director of the Pembina Institute. "But until we see the details of spending programs and regulations to complement the tax as well as the longer-term level of the tax, we cannot say whether these policies would achieve the deep cuts in emissions that Canada needs to make."
The proposed tax would be levied on the emissions from burning fossil fuels such as coal, natural gas and heating oil, and would also apply to gasoline, aviation and diesel fuel once the level of the carbon tax exceeds the existing taxes. The carbon tax would be "revenue neutral," meaning that all the funds collected would be returned to individuals and businesses through the tax system. This means that additional public funds would be needed for spending on critical climate solutions like renewable energy.
"As important as it is to put an adequate price on emissions, a carbon tax is just one tool in the policy toolbox," said Matthew Bramley, Director of Pembina's climate change program. "To create an effective climate plan, Mr. Dion must also make specific commitments to provide the funding necessary for a massive scale-up of renewable energy and energy efficiency, and to implement tough regulations in key sectors like vehicles."
"Mr. Dion's proposed carbon tax is welcome but it only represents a first step," continued Bramley. "A range of studies show that Canada needs to move quickly to a much higher price on greenhouse gases - of at least $75 per tonne by 2020 - if it is to come close to the pollution cuts we urgently need to make."
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Please note: All Pembina Institute staff are currently at a retreat and will therefore be unavailable for further comment until June 23. The Pembina Institute has published an assessment of the government's March 2008 proposal for putting a price on industrial greenhouse gas emissions through regulations; this analysis is available at www.pembina.org/pub/1614
The backgrounder Carbon Taxes: Key Issues, Key Questions is also available at www.pembina.org/pub/1646
