Actually,

...diesel and home heating oil, it works out to about 2.7 cents per litre, rising to 8.2 cents by 2012. Meanwhile, drivers will have to pay an extra 2.4 cents on a litre of gasoline at the pumps, increasing to 7.24 cents per litre.

Gotta start somewhere.

I admire them for taking prompt action. The merits of schemes like this and carbon trading are oft debated so it would be good to have concrete cases as evidence to get rid of some of the hot air.

The building I'm currently in is heated in a CHP plant co-firing with waste; so some of the petroleum becomes fuel via a means that would escape this tax. Just taxing carbon coming out of the ground should be easier to avoid loopholes.

I'm don't understand a retail tax that applies to fuel not sold for retail (eg oil companies using there own product). Would it cover the petrochemicals used to produce ethanol?

I have a suspicion that if the UK gov tried to impose carbon taxes ON TOP of our already ludicrous fuel duty, they'd be lynched.

Currently we're paying £0.99/litre just now.

Thats $7.34 (US) per US gallon with £1 Sterling = $1.96 US

Almost exactly 2/3rds of that is tax. The pre tax price is about 33.9 pence/litre.

This includes the retailers profit, the wholesalers profit, the refinery profit and the oil company profit. Plus of course all their costs too.

Its worth pointing out that we have plenty of 4x4 and Porsches tooling about even at those prices.

Still, if the price of raw oil went stratospheric overnight, the government could reduce/abolish fuel duty to prevent rampant inflation. The US does not have this option.

Andy

What a bad idea! With all respect to those that think higher taxes is the answer. You could not be any more wrong. This will only increase the bourdon on the lower, lower middle and middle class. Even with the oppressive taxes that they have in Europe, they did not stop the rich guy from driving his Ferrari, nor did it stop the upper-middle class from getting their BMW.

sola

Be very careful of what you wish for. What they come for next could be something YOU like.

Honour the intellectual debate.

Now that's just precious!

The question isn't whether it stops the richer, more successful person from driving whatever he/she wants but to drive down total consumption of fuel. This can already be seen in areas where gas prices are higher than the US. Less mini-vans and SUVs. For example, in Canada, already sedans are sold in higher numbers than the light truck segment.

This is supposed to be revenue neutral as well, lowering taxes for people in general as well. Whether of course they will invest any savings in more efficient items of course is something else....

bcgasprices.com says that current gasoline prices are about 107 in BC. What is that, cents per liter? So an increase of 3-8 will be about that, 3 to 8 percent. As commented above it seems doubtful that this will drive much of a change in behavior.

I checked the electrical situation - coal fired electricity tends to get hit worse by carbon taxes than oil. But BC is lucky, they get 80% of their electricity from hydropower, so the tax won't make much difference there.

Revenue neutral, yes.

Half of BC population lives in sparsely populated Interior and North, and depends overwhelmingly on revenue supplied by primary jobs in energy intensive sectors like logging and mining. Logging companies are hit hard by US housing crisis, and both industries face dangerous erosion of profit margins because of high Canadian dollar. Additional carbon taxes to these import-oriented and energy intensive industries mean that some of them will close, and move operations to locations without carbon taxes, like S.America. Local folks thrown out of work by the last straw of carbon taxes will still have to heat their homes in harsh Canadian winter – in mountains and North – with huge amounts of propane and heating oil, and pay increased prices for grocery and everything else – almost everything is trucked (using –surprise! – diesel fuel) from thousands kilometers afar. And mind you, they drive pick-ups not for fun, it is close to necessity to their lifehood, their small businesses, and simply because of snowy mountain roads and regular high-speed collisions with deer.

If one want to reduce wastage of precious HC resources and reduce carbon emissions, start with taxing of limousine liberals, luxury SUV machos, and flights on private jets to conference in Bali. I voted in my local government to work on local problems, not to waste my money on global scams.

P.S. According to most precise data from coastal lighthouse meteo stations, climate in BC have not changed a bit from the beginning of 20 century. Last two years were substantially cooler and wetter than 20 years average (which led to heavy losses to agriculture), and two winters were especially cold and snowy, due to switching to cold phase Pacific Decadal Oscillation. No wonder new taxes are scheduled to kick in at July, statistically warmest month on Pacific coast

Joseph: If you value the opinions of Economists on this topic then check out publications by Prof. Mark Jaccard of SFU. He's an environmental economist who has a couple of books out on the topic of energy and public policy options for the reduction of AGHG emissions. If you wish to avoid the costs of climate change (assuming that you think that climate scientists are correct) then you're only options are regulation or taxation. On the surface regulation would appear to be tax free, but in fact has hidden costs and is often less effective anyway.

Neil

I am an Economist on this subject. The good folks at TCU would agree. The theme of my Masters Thesis was 'Transportation Economics'. With regard to Prof. Jaccard, I have not read his work. However, if he believes that regulation and/or taxation are our only options, then his theory is short sighted. The price of fuel has more than DOUBLED in the last few years and that did not drastically reduce fuel consumption. Do you honestly think that .10 - .30 a gallon will do anything to change behavior? Diesel fuel has gone up .45 in the last month, it didn't change the distance between my front door and my office chair. We need to ENGINEER our way out of the problem, it is the only permanent solution.

A carbon tax may be something that has occurred to the business economist as well. There has been talk of something like it for years. I would think that most people in business have at least considered the possibility.

There are so many externalized costs associated with the burning of fossil fuels the case almost makes itself. Industry can lobby against it, but when the revenue goes to helping the overall situation get better, you might just win the political battles.