The Carbon Tax: Revised

This article will examine how a country like Canada can implement a more inclusive system for the carbon tax. I will suggest a solution that could work while appeasing most (if not all) stakeholders related to the policy.

The current tax suggested is a smart power technique, with a slight emphasis on hard power. It punishes businesses and individuals for their current mode of living, impedes business sovereignty, and opposes the neo-liberal system (a model which the west is trying to follow).

The new system should reward good behavior, and capitalize on tools available to the government for revenue generation. Businesses should be able to conduct their business in a way they have to, but doing it in a green way is encouraged. Individuals should be able to live on their own terms, but if they produce less carbon they are rewarded in the form of rebates. This encourages more individuals to get involved with the cause. To generate revenue, the government should capitalize on the tools it owns and creates a system to fund the rebates through that.

The 2 key points of the new plan are:

1. Giving small businesses and households rebates for going green.
2. Utilizing 20% of the Trans — Mountain pipeline revenues for an investment fund.

Rebates

The first point of the new plan is giving small businesses and households rebates from going green. This will encourage more individuals and businesses to adopt green practices. Individuals and businesses would receive rebates for installing solar panels. This reduces the cost factor (a big hindrance to many) and lowers dependency on carbon power generation. In Ontario, Canada a similar program was instituted for electric cars. While it was in action, many individuals bought electric vehicles as they wanted to make the switch but the cost was too high. Individuals and small businesses want to make the switch to a more eco — friendly option, but the cost is too high sometimes. Providing rebates to lower the cost of such options will reduce carbon emissions.

Pipeline Revenue

The Trans — Mountain pipeline, previously owned by Kinder Morgan, is owned by the Trans — Mountain pipeline company. This company is a subsidiary of the Canadian government and sees many of its revenues flowed back to the government. According to a recent report, the pipeline was expected to see an EBITDA of $1.5 billion. Estimating net income for that year, we could safely assume a net income of $800 million. 20% of this ($160 million) would be enough to start an investment fund where the money goes towards decreasing Canadian dependency on fossil fuels. Norway and Saudi Arabia have employed a similar model, but use their oil well revenue for their investment fund. This fund will allow more money to go towards Cleantech, and research for more environmentally friendly solutions. Without increasing the cost of living for individuals, revenue can be generated for a cleaner future.

These 2 areas focus on a new system in which Canada is able to generate revenues from fossil fuels currently while enabling itself to function in a completely green society. It matches the needs of a free-market state and ensures all stakeholders are satisfied.

Disclaimer: This post is solely the opinion of the writer. The writer is not a professional in any means and encourages individuals to perform their own research as well.