Strange news from BC, which specializes in the stuff. Premier John Horgan, ardent advocate of carbon taxes and foe of pipelines, says if gas prices keep rising the government will consider “some relief” for those who can’t afford record prices (almost $1.64 a litre on Thursday in Metro Vancouver). On Monday, BC’s provincial carbon tax went to $40/tonne, twice the new federal levy, but the Globe & Mail reports that “Horgan said he can’t explain a 12 cent a litre increase and perhaps the industry should invest more in refineries and the federal government should invest more in supply.” And maybe in pipelines to deliver the supply. Oh wait…
As Dan McTeague, now an analyst with GasBuddy.com and formerly an MP prone to denouncing gas company collusion whenever gas prices rose, reminded people, in BC “You’re paying over 52 cents a litre in taxes to the federal, provincial, carbon and TransLink taxes” which is some 18 to 20 cents more than most provinces. Big mystery why gas is expensive there, then.
The opposition Liberals did the usual thing of claiming the government didn’t care about the poor while agreeing that gas must be priced out of reach to save the environment except not if it gets too expensive which it must.
Then the provincial NDP Environment Minister said it wasn’t them at all, they’d been putting carbon tax revenue toward various affordability measures and besides the Liberals hiked gas taxes 15 cents and we only added 2 cents. All of which is very strange because their position is that it’s good to make gas too expensive for people to keep using, yet they vocally insist that they did not do and would not do what they insist must be done. Their position seems to be that it worked but they didn’t do it and should get credit.
The Globe story went on to belabour the obvious, regrettably necessary in such cases, quoting “Nic Rivers, Canada Research Chair in Climate and Energy Policy at the University of Ottawa” that incentives matter and that, in the Globe’s paraphrase, “B.C.’s carbon tax has already prompted many people to ditch their cars for bikes and transit alternatives.” Which was, again, the whole point. Rivers’ calculation is that when the BC carbon tax reached $30/tonne 2012 it reduced emissions somewhere between five and 15 percent (reminding us that computer modeling of the economy is about as reliable as computer modeling of climate.) His and other studies, Rivers says, “suggest consumers have indeed reduced their consumption of gasoline and natural gas as prices go up. Which isn’t surprising.”
No. Not even slightly. What would be surprising is if higher prices did not make people buy less of something (except “status” luxury goods). The question is how much less and here the problem is “price elasticity of demand”. Because fossil fuels are so essential to virtually everything we have and do, there’s very little way to use less of them, so instead we cut back on other things. As Rivers also noted, biking to work or taking the bus isn’t as practical in rural BC as downtown Vancouver. And in fact there is serious doubt that BC’s carbon tax has achieved the great results frequently ascribed to it by the all gain and no pain crowd.
In point of fact the result has been pain at the pump and little or no reduction in emissions, except of goofy rhetoric. The whole point of the carbon tax is to make gasoline unaffordable, and when it works, its architects go whaaaaa?