British Columbia’s bombshell announcement of a carbon tax shift last month made me want some context. Here’s a rundown of other carbon taxes elsewhere in the world. As I noted, none of them is as consistent and comprehensive as BC’s, though some do have higher tax rates. In most cases, these levies came in tax shifts that reduced payroll taxes, business taxes, or other energy taxes. BC’s starts at Cdn$10 per metric ton of CO2-equivalent and rises in steps to $30 in 2012.
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Finland’s carbon tax, first enacted in 1990, is now $27 per metric ton of CO2e at current exchange rates. (All the rates I mention next are in the same units.) Sweden’s, enacted the following year, is now $69, although industry pays half as much and electricity-generation fuels are exempt. (Rates calculated from this and this.)
Denmark and the Netherlands also began taxing carbon in the early 1990s. Denmark’s tax is $14 for household fuel use but half as much for businesses. Poland and Switzerland have small carbon taxes, too, and the governments of Australia, Japan and New Zealand have seriously considered carbon levies. On this continent, before British Columbia’s announcement, Quebec enacted a token carbon tax last year, set at about $3. Then, just weeks before BC’s bombshell, California’s Bay Area Air Quality Management District proposed a starter carbon fee.
Three other jurisdictions claim carbon taxes, but they overstretch the definition. The UK has a small tax on certain forms of energy called a “climate change levy”; it isn’t actually based on emissions. The City of Boulder, Colorado, taxes electricity and calls it a carbon tax; it does exempt certain renewable power.
Like Sweden, Norway imposed a tax on carbon in 1991 and, like Sweden, Norway exempts a raft of industries. Norway’s tax rates average $21, but they are confused and inconsistent. They charge gasoline and natural gas more heavily than coal, in direct contradiction to those fuels’ relative carbon emissions. To me, Norway appears to have a peculiar energy tax, not a carbon tax.
So British Columbia with its $10-going-on-$30 tax on all fossil fuels burned in the province isn’t the highest carbon tax, but it’s the most consistent and comprehensive. And the province’s clean and clear tax reductions for businesses and families, with dividends for low-income families, are exemplary. Now, if we can just keep the annual rate increases (and income tax reductions) going . . .