Climate change activist Bill McKibben has reduced the prescription for a horror-free future to a simple equation.
“It’s simple math: we can burn less than 565 more gigatons of carbon dioxide and stay below 2°C of warming – anything more than that risks catastrophe for much of human life on earth. The only problem? Fossil fuel corporations now have 2,795 gigatons in their reserves, five times the safe amount. And they’re planning to burn it all…”
While McKibbon’s Do the Math campaign is pressuring universities to sell their fossil fuel stocks, his grassroots message is well understood by some high-powered organizations. The International Energy Association (IEA) is saying the same thing: that a stable climate and economy require the majority of the global reserves of fossil fuels to stay in the ground if we want to have a chance of limiting global warming to 2°C.
While British Columbians and Canadians understandably cling to the known revenue streams of coal, oil and gas extraction, the growing gap between scientific evidence that humanity is accelerating over the climate change cliff and the growth plans of fossil fuel industries is opening up what some are now calling systemic global financial risk.
HSBC recently calculated that the major European oil and gas companies could lose between 40% and 60% of their market value if those fossil fuel reserves really did end up staying in the ground.
Closer to home, B.C. already has a carbon tax, a tool that could help steer us through what Post Carbon Institute Fellow Paul Gilding predicts will be “the fastest and most dramatic economic transformation in history.”
The Brookings Institute says economists like the carbon tax because it’s the most efficient way to correct the market failure of unpriced costs of fossil fuel use, which result in too much production and consumption of fossil fuels.
This is the tax that should be increased, not the corporate income tax. Evidence is coming in from around the world that carbon taxes do not dampen overall economic activity. In B.C. economic growth per capita here has stayed consistent with the rest of Canada even as the average British Columbian’s consumption of fossil fuels has dropped 15.1% since 2008 while the rest of Canada’s per capita sales have increased by 1.3%.
Just as important as getting rid of carbon tax exemptions for fossil fuel producers is getting the corresponding tax reductions right. That means rethinking the initial round of tax reductions, most of which did nothing to lower carbon emissions, like the blanket reduction of all corporate income taxes, some personal income tax reductions, and lower school property taxes for farmland.
Now that the Liberals and NDP have both given up on “no new taxes,” it makes a lot more sense from an economic transformation point of view to follow the advice of the newly formed Better Future BC coalition. It wants half of slightly increased carbon tax revenue to be spent on “energy efficiency, innovation, public transit and other community solutions to climate change.”
The Canadian Manufacturers and Exporters (CME) thinks the manufacturing sector is worthy of first crack at carbon tax revenue, having invested in innovation sufficient to meet the Kyoto protocol. Although manufacturing is shedding jobs, it’s also growing in productivity, innovation, exports, and international competitiveness, all-important attributes in times of economic upheaval. Why take carbon tax money from value/export generators like manufacturing and give refunds to every business, including banks, hairdressers and raw resource extractors who don’t spin off nearly the same economic benefits? •
