Recently a study commissioned by Citizens Climate Lobby was done by Regional Economic Models Inc (REMI) asking what the effects of a carbon tax would be on Americans and the economy. The answer was not, at least to me, all that surprising.
Taxing CO2 can reduce carbon dioxide emissions and create jobs!
The study posited that if a tax began at $10 per tonne and increased by $10 per tonne every year, revenue generated, recycled back into the economy, would generate 2.1 million jobs in 10 years.
Not bad!
"Detractors have said that a carbon tax will kill jobs,” stated Mark Reynolds, executive director of Citizens Climate Lobby. “The REMI study turns that assumption on its head."
http://cleantechnica.com/...
Okay, you say, but exactly how does this tax create jobs?
Let's jump over the orange carbon cloud and find out
One place in North America has a carbon tax they have been implementing for the last 6 years: British Columbia. So let's examine how their tax works and how it affects the average British Columbian and their economy.
The BC carbon tax was started in July of 2008. The tax begun at $10 (Canadian) per tonne of CO2, and increased by $5 per tonne every year. It is now at $40(C) per tonne.
This tax is revenue neutral - the tax is collected by the BC government, and returned to it's citizens in the form of income tax cuts and rebates. As of 2013, the tax is generating $1.2 billion(C) annually (or $270.00 per person) and is divided more or less equally between business and households. Those with low incomes get a per-person payment of approximately $115.00 annually and those outside the Lower Mainland ( Vancouver Island and Vancouver area) get an additional $200 per year. Personal income tax breaks focus on those below $75,000 per year.
BC has the lowest personal income tax rates in Canada for incomes of less than $120,000 per year (even lower than in oil-rich Alberta) and among the lowest corporate tax rates in North America and the G7 nations (BC Gov). The most visible form of the carbon tax is on gasoline prices, adding C$0.07 to a litre (US$0.25 per US gallon) at the pump. For comparison, BC retail gasoline prices are, roughly, 40% more expensive than in neighbouring Washington State, similar to Australia and 40% cheaper than in the UK.
What does all this mean for BCs economy? Well, according to
http://www.skepticalscience.com/... , the economic growth is slightly better than the rest of Canada.
How this works: the money BCrs save on taxes and get in rebates goes directly back into the economy. People spend it! That extra money going into retailers helps them expand their business.
It's simple, stupid ( okay, misquoting Judge Judy..pathetic!)
However, BC carbon tax can only go so far. It's only a province. The big guns..America, China and Europe, as well as the rest of Canada need to implement a carbon tax of their own.
The Obama administration has just revealed new regulations for the EPA and I hear the Republicans are baulking and refusing to fund the EPA. Maybe a carbon tax will sit better with them?
"If Republicans don’t want more EPA regulations, their best recourse is to deliver a revenue-neutral carbon tax, which is supported by conservatives from George Shultz to Greg Mankiw,” Reynolds continued. “With the REMI study showing a carbon tax that returns revenue to households will add millions of jobs, this is the option everyone can embrace.”
For more information and great graphs see:
http://www.skepticalscience.com/...