QUEBEC TO TRY CARBON TAX

A VERY important story: Most places are so opposed to ANY tax that they reject a carbon tax out of hand, leaving the market-based cap-and-trade system as the only politically viable way to control greenhouse gas emissions. This will be an opportunity to see how a carbon tax works in real life.

Quebec Approves Carbon Tax to Cut Greenhouse Gases
Frederic Tomesco, June 7, 2007 (Bloomberg News)

WHO
Quebec Premier Jean Charest, Quebec minority Liberal cabinet; Natural Resources Minister Claude Bechard; 50 companies, including Petro-Canada (spokesman Andrew Pelletier), Imperial Oil Ltd., and Hydro-Quebec; Petro-Canada, Ultramar and Shell Canada (spokeswoman Simone Marler ) refineries and 1500 gas retailers
Canada Prime Minister Stephen Harper, Environment Minister John Baird
the economic implications of a carbon tax are complicated (click to enlarge)
WHAT
The Quebec government voted to institute a tax on the consumption of carbon-based fuels.

WHEN
The tax, proposed in 2006 and approved June 4, goes into effect October 1.

WHERE
It applies only in the province of Quebec, Canada’s 2nd most populous.
But we've got to do something (click to enlarge)
WHY
- Put in place to disincentivize consumption of fuels producing greenhouse gases (GHGs) when burned
- 0.8 cents Canadian/litre gasoline, 0.9 cents/litre diesel, 0.96 cents/litre light heating oil, $8/metric ton for coal.
- Prices expected to be passed to consumers
- $200 million Canadian increased tax revenues (gasoline producers: C$69 million, Diesel/heating oil producers: C$80 million, electricity/natural gas firms: C$43 million, coal/propane: C$7 million) will implement a “green fund” w/GHG cutting program and fund public transport
- An Exxon Mobil representative said the company preferred a tax to a cap-and-trade system because of the greater simplicity.

QUOTES
- Bechard: ``Everyone is talking about the environment; everyone wants to play their part…Well, the oil companies too have to play their part...I don't think that we will put any pressure on the gas price…''
- Pelletier: ``We will look at the green tax, we will see how it impacts us and we will decide in due course what to do with it…There are more discussions internally to be held.''