Wednesday, February 20, 2008

British Columbia Joins the Pigou Club

Yesterday's BC budget lays down a carbon tax; $10/ton going to $30/ton for 2012.

I approve. They say it will be revenue-neutral, but that's unlikely. I imagine there'll be a bit left over. It's also not clear which types of taxes were cut to return the program income to business and low-income families, but at least they are cutting taxes as opposed to increasing G.

Unfortunately, the carbon tax only applies to fossil fuels directly, which will result in distortions: oil-based plastics, for example, made in China will not be hit by the tax at all, (I think), putting British Columbia business at a little disadvantage. There are some nice tables at the bottom projecting what extra costs will be imposed on drivers, for heat, etc, under the tax.

UPDATE: I'm on the waitlist at Minnesota. "You are currently one of the top students on the list and we anticipate, based on past experience, that we will be able to make you an offer at some point."

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