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The federal government has terminated its carbon pricing for consumers, and that’s what Expect to save on gas pumps. But what are the carbon taxes and rebates actually doing for the climate? Now that it has disappeared, what will the impact on emissions have? This is a closer look.
How should consumer carbon taxes and rebates reduce emissions?
Justin Trudeau launched in 2019 the federal government’s consumer carbon pricing is applied in provinces without its own carbon pricing.
It has two parts:
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A surcharge or tax on carbon-emitted fuel prices has been added, which will increase from $20 per ton of carbon in 2019 to $170 per ton in 2030. As of March 31, it’s over Add 17.6 cents to gasoline, 15.25 cents per cubic meter.
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Canadian carbon discounts based on household size are paid four times a year to offset consumption, returning 90% of income from taxes. April payment will be the last family to receive.
This raises the price tag of carbon-emitted fuels, aiming to curb its use. “When some people spend more people using it, we find ways to be more effective or alternatives,” said Stewart Elgie, a professor of law and economics at the University of Ottawa.
These alternatives may include things like getting an electric car, doing a transit or cycling, insulated a house or replacing a stove with a heat pump.
Dave Sawyer, chief economist at the Canadian Climate Institute, and Stephen Gordon, professor of economics at Laval University, explain the impact of carbon tax on estimates that Canada once again reduces total carbon emissions.
Climate discounts allow the government to raise fuel prices without affecting people’s overall costs. But that also increases the motivation to reduce emissions, because even if people don’t buy fossil fuels, they receive payments.
“The more you reduce, the more you get into the watch,” Elgi said. “Those who reduce the money they end up making.”
But is it actually working?
Yes, according to the Canadian Institute of Climate Research Report for 2024. It found that carbon pricing for consumers and industries will play a “leading role” in reducing emissions by 2030.
However, industrial carbon prices It is expected to have three times the impact of consumer carbon prices. Consumer carbon prices or fuel expenses are expected to be reduced by 8% to 14%, while industrial carbon prices are 23% to 48%.
“In some ways, losing consumer carbon prices is just an emphasis on the importance of industrial carbon prices, which is very important for delivering competitiveness and reducing emissions,” said Dale Beugin, co-author of the Canadian Institute of Climate.
Liberals under new leader Mark Carney promise to generate industrial carbon prices if the upcoming federal election is elected. But the conservatives under Pierre Poilievre Promising that industrial carbon pricing will be cancelled if elected.
Pierre Poilievre said the Conservative government will end industrial carbon taxes and consumption carbon taxes – advocates say the plan will also end any opportunity Canada has encountered targeted emissions reductions.
Overall, Canada’s emissions are Despite economic growth, it is still declining. In 2023, Canada launched 694 mega-saurus carbon dioxide, down 0.9%, down 8.5% from 2022 and 2005 Federal Government Report.
“We finally see success in building a clean economy after decades of failures in reducing emissions and building a clean economy,” Elgi said. “That’s because our climate policy is working now.”
Will the loss of consumer carbon tax lead to an increase in Canada’s emissions?
Not necessarily what Elgie and Beugin said.
This depends in part on whether the government maintains its current climate policy. They include Target for selling electric vehicles and Cleaning fuel standards Even without a carbon tax, this could both push consumers toward electric vehicles.
Pierre Poilievre has long said the Conservative government will be “anxe” – which he confirmed, including reducing industrial carbon taxes. This comes days after Prime Minister Mark Carney took steps to eliminate consumer carbon taxes. Chris Severson-Baker, executive director of Pembina Institute, joined Power & Politics to discuss these policy shifts that would leave Canada’s climate goals.
Elgie said it also depends on whether consumer carbon prices are replaced by other climate policies that lead to equal reduction in emissions. These may include subsidies for cleaning technology, such as electric vehicles and heat pumps or regulations.
Carney said if elected, he would use Rebate programs to reward Canadians for purchases such as energy-efficient equipment, electric vehicles or better home insulation.
Ergi said this may help reduce emissions, but research Including some of his own researchshowing that the cost of such subsidies may be more than just carbon pricing. Carbon pricing is considered the cheapest and most effective way to reduce emissions because it is the most flexible and allows everyone or business to choose the one that best suits their emissions.
Cleantech kickbacks and subsidies have been a lot of success in the U.S., Beugin said, but they are paid by taxpayers and have the potential to be used to pay people to do what they may do, even if there is no subsidy.
He said the policy that needs to cut emissions the most is buildings. “This is one of the areas where it’s still in the wrong way to reduce emissions,” he said, suggesting that more can be done to improve energy efficiency and get rid of burning fossil fuels for heat, such as tighter building regulations.
While prices of technologies such as heat pumps may help, the government still has a necessary role in promoting emissions, Begin said.
“We are not delivering us as a country’s emission target without policy incentives.”
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