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OTTAWA — An internal report prepared for the Conservative government reveals a carbon tax as high as $50 per tonne of greenhouse gas emissions would cause little economic damage and would actually provide a small boost down the road.
After securing the report through access to information, Green Party leader Elizabeth May is claiming vindication, as the only party proposing a straight carbon tax as the solution to climate change.
In a statement, Ms. May said Prime Minister Stephen Harper and Environment Minister John Baird “continue to spread fear that a carbon tax will cause economic calamity, but they know this is not true.”
The report, from economist Mark Jaccard, analyzes the potential impacts of various climate change measures on Canada's gross domestic product.
Green Party Leader Elizabeth May released a document Wednesday suggesting a carbon tax as high as $50 per tonne of greenhouse gas emissions would cause little economic damage. (CP)
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The report was presented to Natural Resources Canada's Office of Energy Efficiency on Jan. 16, 2007.
The report assesses the impact of carbon taxes ranging from $10 to $250. The Green Party is focusing on the impact of a $50 tax as that is the key part of the party's platform – which also calls for the tax revenue to fund separate tax cuts.
At $50, a carbon tax would shave about $4.8-billion from Canada's GDP in 2010, which works out to about 0.09 per cent of GDP. However by 2020, the impact would become slightly positive for the economy, working out to a 0.004 per cent increase to the GDP.
The report uses the term carbon tax and carbon trading permit interchangeably. A carbon tax is generally considered to be a fee imposed on business for every tonne of greenhouse gases emitted into the atmosphere. It is named a carbon tax because carbon dioxide is the most prevalent greenhouse gas.
A carbon trading system sells emission permits to companies at a set cost. Companies can reduce the need to purchase credits by reducing their greenhouse gas emissions, or they can buy credits from other companies if emissions exceed government-set targets.
The Conservative government has promised some form of emission trading system and has indicated the cost of permits will start at $15 per tonne.
The Liberal party has proposed a variation on this called a carbon budget, in which companies that are over a set limit can buy credits starting at $20 per tonne. Companies can get their money back if they invest in technology that reduces emissions.
While welcomed by the Green Party and the Liberal party, Dr. Jaccard's report also challenges the opposition's claims that Canada's Kyoto targets can be reached by 2012.
“It will be very difficult to attain emission reductions in the 100 megatonne range . . . within the Kyoto time frame,” Dr. Jaccard writes.
The professor of resource and environmental management at Simon Fraser University is the author of Sustainable Fossil Fuels: An unusual Suspect in the Quest for Clean and Enduring Energy. The book generated controversy in the environmental movement for its claims that energy sources such as coal and oil could one day become emission-free.
While Dr. Jaccard was initially praised by the Conservative government, Tory MPs have been under fire this month by the opposition for resisting a scheduled appearance by Dr. Jaccard before the House of Commons environment committee.
