Tuesday, February 26, 2008

Suzuki's Carbon Tax

In case anyone is wondering, the Suzuki Foundation's carbon tax plan is being exaggerated in their press releases.

First of all, the prediction of $50bn is in 2003 dollars - in 2020, at a carbon price of $75. Given that the economy will be much larger in 2020, $50bn of 2003's purchasing power then isn't as much in percentage terms as it is now. $75/tonne is considerably higher than is being talked about now, as well.

Perhaps more importantly, the entirety of these carbon tax revenues are sunk back into the economy to keep it ticking - one cannot squeeze an extra eleven figures out of the economy without something bad happening - so a carbon tax doesn't give the government all sorts of cash to play around with by sheer force of awesomeness. Depending on just how the carbon tax is returned to the economy, the plan either keeps government revenue neutral, raises it "slightly" or depresses it "somewhat".

Buried deep in the pages of the report, they also cop that the tax would likely be somewhat regressive. Now, I still think it's a great idea - one ideally implemented in tandem with as much of the world as possible, but Suzuki is being a little disingenuous.

1 comment:

allan said...

Yet another tax is so Canadian a solution--could anyone but a Canadian believe in it?
It should be obvious that if the government is hamstrung in the face of the vast revenue it already collects more money won't make anything better. What we'll get is yet another money guzzling pointless bureaucracy which will quickly become yet another waste of energy in its own right. (Far better to mandate that the various governments halve their own transportation expenses.) The upper class 'environmentalists' will be minimally affected while getting their immense egos stoked--you can be sure you'll never find a hairshirt in their personal wardrobes.