In efforts to meet the requirements agreed upon at the Climate Change conference in Paris, Canada must start enforcing carbon taxes. As it’s number one goal is to reduce its carbon emissions from how they were in 2005 by 30%, enforcing taxes on big carbon emitters seems to be the most viable solution at the moment. Reducing Canada’s emissions by 30% means taking out 200 million tons of CO2 emissions in 13 years. Challenging, but hopefully possible.
The Plan
The prime minister, Justin Trudeau, announced the “Pan Canadian Framework for Clean Growth and Climate Change” plan last fall after the Paris agreements. This plan was developed with the provinces and territories in hopes of reducing the carbon emissions. Trudeau gave the provinces and territories until 2018 to shell out their own prices, if they do not have a plan out by 2018, Ottawa will enforce it on them.
The minister of environment in Canada, Catherine Mckenna proposed three options for the provinces:
- The provinces/territories must declare their own pricing and plan on the carbon emissions starting at $10 a tonne or;
- They must set up their own cap-and-trade systems* or;
- They must use a hybrid model as based on Alberta’s program that Ottawa is imposing as well.
The $10 a tonne is just a starting point; the price would rise by $10 a year until it becomes $50 a tonne in 2022. Any revenue generated by the tax incomes would be returned to the provinces and distributed as seen suited.
The Role of the Provinces and Territories
Although eight provinces and all three territories signed on to the carbon pricing plan through the Pan Canadian Framework for Clean Growth and Climate Change, only four provinces have carbon prices in place.
Saskatchewan and Manitoba are most likely the ones who will have the Carbon taxes imposed on them as they haven’t signed plan. On the other hand, B.C. and Alberta have carbon taxes, and Ontario and Quebec have a cap-and trade system which inspired Nova Scotia to also get one in 2018.
Check out the graph below of the CO2 emissions produced since the 17th century. Notice how abrupt the rise is from the 90s until now:
Seeing how much CO2 we have put in the atmosphere in the last 20 years alone should be a big motivator for us to want some change.
*Cap and Trade system
A cap and trade system works where a cap/limit on the amount of greenhouse gases emitted in the atmosphere is set up by the government. The limit goes lower gradually to make sure there is less and less pollution in the air. Users of Carbon and other greenhouse gases can buy off Carbon “credits” from the government. When they reach their limits, they can buy off unused credits from other companies. The goal of the system is to encourage industries to reduce their carbon footprint by making them pay for it.
Stay tuned for more updates on the plan!
What are your thoughts on the carbon taxes in Canada? Do you think they’ll be beneficial or not? Let us know in the comments below!
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