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Thoughts about the relationships between transport and the urban area it serves

Archive for January 8th, 2008

Carbon taxes

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Yesterday Canada’s Environment Minister John Baird was dismissing the idea of a carbon tax, being recommended by a committee appointed by the government, as a “Liberal idea”.

This morning, Vaughan Palmer is speculating that there will be a “revenue neutral” carbon tax in the next provincial budget.

A little while ago there was discussion on an email list on what carbon tax revenues should be spent on. And I contributed the following thoughts, which seem worth repeating here.


Tax dollars should never be “predicated”. It is essential that when projects are evaluated, they are compared fairly to other projects and the best value for money for that increment of spending is calculated. If gas tax can only be spent on building roads, it is no surprise that you end up with too many roads – and not enough hospitals to deal with the consequences of car dependence.

Carbon taxes should replace other taxes, not be additional. They should be applied to both personal consumption and commercial spending. That way we will get better individual decision making. Unfortunately, consumption taxes are not nearly as progressive as income tax, but that has been so heavily skewed in recent years that it needs reform anyway. It is ludicrous that poor people pay a higher percentage of their income in tax than wealthy people do. And many of the richest pay no tax at all thanks to their clever accountants and off shore corporations.

For transportation projects, we suffer from political agendas which means we cannot now trust anything that is presented to justify projects. Because always the decision was made long before any of the studies were done, and most are simply PR exercises in making respectable “done deals”. We also need to be able to think through decisions carefully. For example, we still cannot make sensible choices between capital cost and operating cost. The objectives of nearly every major road project in an urban area can be better achieved by traffic management. Most of the major ribbon cutting opportunity mega projects have lower rates of return than careful redesign and maintenance programs – making better use of what we have. We buy buses that are needlessly expensive so that we can boast about how clean they are, when any bus produces less pollution per passenger kilometre than the average of our present automobile fleet.

And do not forget we waste huge sums on needless trips because of our ridiculous attachment to out dated notions of land use planning. Far better to build places that reduce the need for motorised transportation in the first place.


from Hot Air by Jeffrey Simpson, Mark Jaccard and Nic Rivers: p213

Norway, Denmark, Sweden and the United Kingdom have implemented and maintained carbon taxes without a substantial political backlash. Norway, an oil and gas exporter like Canada, imposed a GHG tax in 1991 averaging $30 a tonne, and rising as high as $75 per tonne in some sectors. It has since seen economic growth of 40.3 per cent, compared with 23.9 per cent for Canada. Norway’s GHG emissions have decreased per capita by 0.2%, whereas Canada’s have grown per capita 6%.

Written by Stephen Rees

January 8, 2008 at 10:15 am