Our province’s bold leadership on fighting climate change while driving the economy was put on ice with the B.C. government’s decision to freeze the carbon tax in its most recent budget.
The decision flies in the face of what British Columbians say they want from the tax. Instead of using the carbon tax in a more effective way to make B.C. stronger, the government scrambled to find new revenues to balance the books over the next three years by raising other taxes and even selling off Crown properties and other public assets.
The rationale for freezing the carbon tax and, with it, the incentives it gives to reduce carbon emissions by investing in more energy-efficient technologies or adopting greener practices, was said to be economic. The argument goes that raising the carbon tax — even marginally — would harm B.C.’s economy and threaten our economic competitiveness with provinces that don’t have a carbon tax. But the carbon tax review, released by the government at the same time as the budget, shows it’s working to reduce B.C.’s greenhouse-gas emissions from sources such as gasoline and natural gas. At the same time, our economy has outperformed most of Canada. Carbon taxes are working to spur innovation and keep provinces and countries economically competitive: Quebec, California, nine northeastern U.S. states and even Australia, B.C.’s competitor for liquefied natural gas exports, have all introduced carbon taxes. Sweden, whose economy is similar in scale to B.C.’s, has a carbon tax nearly four times higher than ours and was ranked fourth in the world on economic competitiveness by the World Economic Forum (Canada is ranked 14th).
In fact, B.C.’s leadership on climate change has made us more economically competitive. As the last global financial crisis wreaked havoc on economies worldwide, at home our carbon tax spurred innovation and clean technology sector growth to more than 200 companies. It saw sales projected for $2.5 billion in 2011 with a 48 per cent growth between 2008 and 2010. According to KPMG, 78 per cent of these sales are exports. These clean-technology innovations throughout the province have diversified our economy while making us a leader in climate change solutions that give us cleaner air, energy-efficient homes and businesses, and healthier communities.
The type of jobs we invest in matters. B.C.’s clean-technology sector now employs 8,400 British Columbians in stable, well-paying jobs. These employees are proud because they directly contribute to making our communities healthier places.
At Pulse Energy, an energy-efficiency software company in Vancouver, the province’s leadership on climate change has been a major driver of our international success. The carbon tax has given B.C. companies an economic incentive to innovate by finding new ways to use electricity and carbon-based fuels more efficiently. We’ve got a foothold in the global marketplace where cleaner energy is one of the world’s fastest-growing sectors. Pulse Energy started with just two customers: the University of B.C. and the Village of Hartley Bay. Today, we service about 100,000 commercial buildings, including three of America’s five largest power utilities, and are considered a world leader. We’re hiring every qualified software developer we can find.
B.C.’s technology sector has been the province’s second fastest private sector job creator over the past decade and is outpacing our traditional resource-based industries in revenue and jobs.
And British Columbians say they support the tax on carbon pollution.
Three-quarters of the 2,200 British Columbians who engaged in the review process favoured strengthening the carbon tax while investing some revenues into areas that improve our quality of life, such as better public transit and renewable energy. They want it to be fair for both rural and urban communities.
With all this success, you would think now would be the time to move ahead by reforming the tax and closing loopholes to make industrial polluters contribute their fair share. The B.C. government is missing a huge opportunity by stalling when results show it should be charging ahead.
Ian Bruce is science and policy manager for the David Suzuki Foundation. David Helliwell is CEO of Pulse Energy.