British Columbia’s bombshell announcement of a carbon tax shift last month made me want some context. Here’s a rundown of other carbon taxes elsewhere in the world. As I noted, none of them is as consistent and comprehensive as BC’s, though some do have higher tax rates. In most cases, these levies came in tax shifts that reduced payroll taxes, business taxes, or other energy taxes. BC’s starts at Cdn$10 per metric ton of CO2-equivalent and rises in steps to $30 in 2012.
At least nine jurisdictions elsewhere in the world claim to have carbon taxes. (Good starting places for learning about them are the Carbon Tax Center and these dated but informative US EPAsites.)
Finland’s carbon tax, first enacted in 1990, is now $27 per metric ton of CO2e at current exchange rates. (All the rates I mention next are in the same units.) Sweden’s, enacted the following year, is now $69, although industry pays half as much and electricity-generation fuels are exempt. (Rates calculated from this and this.)
Denmark and the Netherlands also began taxing carbon in the early 1990s. Denmark’s tax is $14 for household fuel use but half as much for businesses. Poland and Switzerland have small carbon taxes, too, and the governments of Australia, Japan and New Zealand have seriously considered carbon levies. On this continent, before British Columbia’s announcement, Quebec enacted a token carbon tax last year, set at about $3. Then, just weeks before BC’s bombshell, California’s Bay Area Air Quality Management District proposed a starter carbon fee.
Three other jurisdictions claim carbon taxes, but they overstretch the definition. The UK has a small tax on certain forms of energy called a “climate change levy”; it isn’t actually based on emissions. The City of Boulder, Colorado, taxes electricity and calls it a carbon tax; it does exempt certain renewable power.
Like Sweden, Norway imposed a tax on carbon in 1991 and, like Sweden, Norway exempts a raft of industries. Norway’s tax rates average $21, but they are confused and inconsistent. They charge gasoline and natural gas more heavily than coal, in direct contradiction to those fuels’ relative carbon emissions. To me, Norway appears to have a peculiar energy tax, not a carbon tax.
So British Columbia with its $10-going-on-$30 tax on all fossil fuels burned in the province isn’t the highest carbon tax, but it’s the most consistent and comprehensive. And the province’s clean and clear tax reductions for businesses and families, with dividends for low-income families, are exemplary. Now, if we can just keep the annual rate increases (and income tax reductions) going . . .
Tim Colman
So what is taking Washington State so long to push for a carbon tax on fuel?Are greens going to give the big oil companies all the loot?Another blog I read says they’re making $10,000,000 an hour in profit right now!http://www.docudharma.com/Meanwhile we cower at he chance to stand up and say we need to raise the price of gas to $5 an hour.I would help with an initiative.Why not? Well– we can wait for things to get much worse. On a separate note—can we get Youram back to help me write the eco argument for a CARBO CREDIT? My brother in law living in Vermont wants to buy some of my CARBO credits as my wife and I are not eating sugar since January—and he wants to eat a pint of Ben & Jerry’s. There ought to be some serious cost benefits and humor in developing a Carbo Credit regime for exercise, health care insurance and other benefits I haven’t thought about.Best fishes,Timothy Colman
Rogers Weed
So how does the carbon tax in European countries mesh with the cap & trade system that the EU is running? Are they additive?
Alan Durning
Roger,Good question. Yes, they’re additive. I don’t understand all the provisions of either, so I can only give a tentative answer. The EU emissions-trading scheme (ETS) only covers a few sectors, mostly sectors that are exempted from the carbon tax or have light tax burdens. More in a future post on how cap and tax interact.
Alan Durning
The Bay Area Air Quality Management District has taken another step toward a tiny carbon fee in its area of jurisdiction.
MVP
Cool! That sounds like interesting news from the Bay Area.Alan, do you have a link to that info, to help put it in context?Cheers,Michelle
MVP
Oh, hey, lookee there! Way up in the original post, there’s already a link, riding in the caboose of the Denmark and Netherlands’ paragraph! …Guess I must’ve contracted a temporary case of Moonwalking-Bear-itis, and just wasn’t expecting to find a Bay Area reference there 😉
Alan Durning
Here’s the Bay Area carbon fee link.
MVP
Thanks! That is an excellent article from the New York Times, carefully chronicling the nascence of this pioneer effort, on US soil. Please keep us informed!