Myths and realities of Alberta’s Climate Leadership Plan – Part 1

calculator-moneyMinister Phillips recently hosted two interactive telephone town hall discussions on the Climate Leadership Plan, paying special attention to the carbon levy and rebates. Over 50,000 Albertans participated and asked many excellent questions. What the town hall revealed was that, unfortunately, there are still a few myths circulating.

Myth #1: The carbon levy is going to raise household expenses by thousands of dollars per year.

Reality: The carbon levy will marginally increase the cost of gases used for heating and transportation. To help offset these costs, rebates will be provided to lower- and middle-income Albertans. More about that below.

Impacts of the carbon levy will vary, depending on your household’s energy use and driving patterns. In 2017 estimated direct costs for a household per year are $191 for a single, $259 for a couple, and $338 for a couple with two children.

Indirect costs from the carbon levy are expected to be relatively low since a large portion of commodities bought by Alberta households are imported from outside the province. These imported commodities are not subject to the levy. Estimated indirect costs of the carbon levy on households will fall within $50 to $70 per Alberta household in 2017.

Myth #2: Rebates make the levy ineffective by handing back collected revenues to consumers.

Reality: The purpose of the carbon levy is to provide a financial incentive to everyone to reduce their energy use. Carbon pricing drives innovation and changes behaviour, encouraging individuals and businesses to shift away from higher emission fuels and become more energy efficient.

The purpose of the carbon levy rebate is to protect those who spend a higher percentage of their income on energy (i.e., heating and transportation) and have fewer financial resources to make investments to reduce future energy emissions. If the rebate is tied to consumption (i.e., the more energy used, the bigger the rebate), then that removes any incentive to reduce energy use, which fundamentally undermines the purpose of the levy.

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Myth #3: The price on carbon won’t actually reduce emissions.

Reality: Economists agree that a price on carbon is the most cost-effective way to reduce emissions. Carbon pricing is meant to influence behaviour. When individuals and businesses know they will have to absorb an extra cost, they will look at alternatives (i.e. driving less or using a programmable thermostat) to save themselves money. It is these changes in behaviour that reduce emissions.

We know this works. According to Statistics Canada, since B.C. implemented its price on carbon in 2008 fuel use in that province dropped by 16%. Over the same period in the rest of Canada, it rose by 3% (counting all fuels covered by the tax). Additionally, energy-related greenhouse gas emissions in B.C. dropped by 6% overall (and 9% per capita) between 2007 and 2011.

You can listen to the recordings of the telephone town halls at:

7 thoughts on “Myths and realities of Alberta’s Climate Leadership Plan – Part 1

  1. Truth, the government is giving a FALSE ACCOUNT of what the carbon tax will actually cost Albertans. They have not factored in that any business that utilizes light, heat or transportation (which is ALL businesses) have to add on a surcharge. The surcharge is up to the business’ discretion. As the creation of services or goods goes through the chain, the surcharge compounds. For example if the raw materials have 10% tacked on, then the shipping is another 15%, then the manufacturer takes that increase then tacks on another 10% on top. Then it is shipped to the wholesale market so there will be a fuel surcharge plus a percentage increase, so the product price is already inflated by the time it hits the consumer……and the compounding cost increases. Secret…business never adds on less than 10 points (ahhh!).The government is lying to Albertans. There is no way that the government can even predict the inflation that is about to hit the province. Fact is this policy of Carbon Tax will DESTROY the poor. They do not have an extra $50 in their monthly budget to cover the government’s tax grab, their kids will starve, they won’t be able to heat their homes, they will be homeless…..while the Alberta NDP throw them a scrap of a rebate. This is the Alberta NDP’s cultural cleansing of Alberta’s poor. A tax to fill the elites and their friends pockets, while they starve out the poor. You should be ashamed. Actually maybe you should scarper off to Ontario like the chief of staff did….he got out before it all hits the fan.He knew this was the beginning of the end of the Alberta NDP government. (Now go ahead and delete my comment, we know you will…the NDP can’t handle the truth!)

  2. PS. if you choose not to okay the comment, I’ve screen shot it. We can turn this into a story of government censorship. You choose. Of course you know that will go out to the media and alt news sites 🙂

  3. Nothing but a bunch of lies, get lost! There is no way a tax rebate is going to save the planet, more energy more trees to cut down for the paper work. You are a bunch of deceiving idiots starving people, and look at the business shutting down and leaving. Look at Australia, there is a reason why they got rid of there carbon tax, and look at Ontario there Heating bills went up 45% in 2 years, nothing to do with saving the planet. The fact is you are liars because these myths have already been proven true, and stop spending our money on this crap!

  4. Taxes increase costs, take money away from consumers and de-stimulate economies. Leaving earnings in the hands of consumers permits growth as directed by citizens and consumers. I understand the direction, but not the path.

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