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Fine Print

Governments are always looking for something else to tax; they'll get to carbon eventually.

Darryl McMahon

Energy Risks: Carbon Tax

'Carbon Tax' is actually a misnomer. A more appropriate term would be Greenhouse Gas Emissions Tax, but that's not as easy to say. Typically, the objective is to remove carbon dioxide, the most common greenhouse gas, from the atmosphere, not to sequester actual carbon, as carbon black is not a greenhouse gas.

The objective of a greenhouse gas emissions tax is to discourage the production of carbon dioxide by the burning of hydrocarbon fossil fuels (e.g., oil, coal, natural gas).

As of late December 2010, not many jurisdictions have actually implemented carbon taxes. British Columbia is one of the few, and contrary to predictions from the right wing and the oil lobby, the B.C. economy did not self-destruct, even while other economies without carbon taxes did during the 2008-2010 economic crises.

In a post-Kyoto world, it is entirely possible the world will divide along climate change economic policy lines; those countries that actively address the issue of climate change so as to reduce emissions and mitigate the effects versus those that do not. It is entirely possible that the latter will face trade tariff barriers when trying to sell goods to the former.

A carbon tax would encourage consumers to move away from fuels that produce greenhouse gases and towards conservation, energy efficiency and energy sources that are more benign, notably renewable, sustainable sources such as solar (thermal and electric), wind, tidal, ocean currents, biofuels (at rational levels), and geothermal. In turn, that shift would encourage investment in sustainable practices, and move these countries into leadership positions in the emerging sustainable, clean energy economy.

It is entirely feasible for a country like Canada to move away from oil to sustainable energy before exhausting the Tar Sands. As Saudi Oil Minister Sheikh Zaki Yamani said, "The Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil." If there is sufficient will in the world to save humanity from itself, oil will be a dirty word. At that time, prices will likely be low enough that exploiting the tar sands will no longer be economical. If Canada is still a backward petro-economy when that occurs, the impacts on our standard of living will be calamitous.

However, in the short term, the most visible impact of a carbon tax will be higher prices for oil, coal, natural gas and commodities derived from them.

Energy Risks
Climate Change
Supply Disruption
Carbon Taxes
Dwindling World-Wide Supply
Removal of Subsidies
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