Carbon tax decision still causing a stir

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FORT ST. JOHN, B.C. – Even though a series of increases in the BC carbon tax was among its 32 recommendations, not every member of the government appointed Climate Leadership Team supports the idea.

David Keane is President of the BC LNG Alliance and has been quoted as saying the industry is not opposed to a price on carbon, but does not support an increase at this time in the 30 dollar a tonne tax.

He says it’s concerned that BC is so far ahead of other jurisdictions that it is prudent for the province to do, what it announced last week it will do, wait until those other jurisdictions catch up.

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Thus, the Liberal government put on hold the recommended annual carbon tax increase of 10 dollars a tonne beginning in 2018 and extending through to 2050.

That angered backers who viewed it as a key to getting BC back on track to reach its ambitious goal of reducing its greenhouse gas emissions by 80% over 2007 levels by 2050.

However in many of their voter base areas, like this one, a tax increase, could very well have been political suicide for the governing Liberals in next spring’s election, especially when considering this province already has the second highest tax driven average price for retail gasoline in the country.

In addition, a tax hike would have meant energy companies behind the province’s proposed LNG projects would have had to factor into their development plans significantly higher carbon tax rates, which by 2024 could have reached 100 dollars a tonne.

Thus, given the continuing downturn in the oil and gas industry, fuelled by stubbornly low natural gas prices, and increased global production, has already resulted in lengthy delays by leading LNG project proponents on final investment decisions, there was concern a carbon tax increase could have been the determining factor leading them to scrap their development plans.

So the government will pursue its 2050 target without the implementation of a 2018 tax hike, as a tool to reduce carbon emissions, but like the Premier, Mr. Keane argues exporting natural gas, a lower-intensity carbon emission fuel, will help replace coal, in areas like Asia, and he says the LNG industry should get some recognition for its small global carbon contribution.

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