Three parties, three strategies

Tag : Fuel Pressure System

On a federal level, the Liberals are trying to persuade voters toaccept a national carbon tax applied at the refineries. TheLiberals claim their tax will raise $15 billion over four years,while the NDP is pushing a nationwide cap-and-trade system.Meanwhile, the Conservatives are hoping the technological solutionof carbon capture and storage will solve the problem.
How do these systems work and what are their strengths andweaknesses?
Carbon Tax What is it?
This is a direct tax on every litre of fossil fuel consumed,including gasoline, natural gas, propane, home heating fuel anddiesel. It can be applied at the pump, as British Columbia isdoing, or at the refinery, as is the case in Quebec and with thefederal Liberals' plan.
Both B.C. and Quebec promise to use the money raised to improve andto expand public transit as well as to encourage energyinnovations.
The goal is to create a financial incentive for individuals andindustry to reduce their fossil fuel use and at the same timecreate a capital pool to finance energy- efficient lifestyles andtechnological development.
Pros: It is a user-pay system that is simple both to implement andto administer. It is also easy to control and amend. It is notsubject to market fluctuations.
British Columbia is predicting its tax will result in a 30-per-centreduction in greenhouse gas (GHG) emissions by 2020 and will raise$1.85 billion in the first three years.
Cons: It does not set any reduction targets. Individuals may findit easier to pay the tax than to spend money on energy conservationmeasures. Ditto for companies, which will probably pass the extracost on to their customers. So it is questionable whether it willultimately lead to any reductions in carbon emissions.
Like any consumer tax, it is a hard sell, particularly when oilprices are skyrocketing. So governments are reluctant to show muchmuscle. They hide the tax, which creates a sense of unfairness, oraccompany it with a string of tax reductions, which can underminethe purpose of a carbon tax. In addition, the tax rates tend to betoo insignificant to persuade drivers to take a bike or hop on abus.
B.C. drivers, for instance, are paying a mere 2.34 cents a litre incarbon tax, which will increase to 7.2 cents a litre by 2012. Thegovernment estimates that the driver of a Dodge Ram pickup thisfiscal year will pay about $68 more on gas. For most people, that'sno big deal.