The effect of cross-border shopping on BC fuel consumption estimates

  • Since the introduction of the carbon tax in 2008, BC has achieved reductions in fuel use of 17.4% per capita and even greater reductions (18.8%) relative to the rest of Canada.
  • During this period there has been a large increase in the number of Canadian vehicles crossing the BC border into the United States , especially for day trips. It is likely that the main purpose of many of these trips was shopping.
  • The current rate of Canadians visiting the US is not unprecedented. Larger numbers of Canadians crossed the border in the 1990s.
  • Although high gasoline prices are a factor in motivating the border crossings, there were many other incentives, for example, the strong Canadian dollar, as well as cheaper dairy products, clothing and electronic goods.
  • On average, a Canadian vehicle crossed the border an additional 1.3 times per year in 2012 compared to the rate  before the introduction of the carbon tax.
  • It is estimated that 1-2% of the refined petroleum product fuel consumed in BC was purchased in the United States as a consequence of the additional cross-border travel. This amount of fuel does not therefore show up in Canadian fuel sales figures, which requires us to make small adjustments to the provincial fuel-use estimates. Nevertheless, the adjusted reduction in BC fuel use over the past four years still exceeds 15% per person per year.
  • The BC carbon tax is an effective policy that has likely substantially reduced emissions, but has not harmed the economy. It is increasingly politically popular within the province.

Continue reading

Update on BC’s Effective and Popular Carbon Tax

Originally posted at Skeptical Science on July 25th, 2013

Stewart Elgie and Jessica McClay of the University of Ottawa have a peer-reviewed article in press in a special issue of the journal Canadian Public Policy. The article is summarized in the report BC’s Carbon Tax shift after five years: Results. An environmental (and economic) success story. The report can be downloaded here and is summarized here.
The results are similar to a previous report that I wrote about in the article BC’s revenue-neutral carbon tax experiment, four years on: It’s working, but updated, with one more year of data.  The new data show that the carbon tax is working even better than reported previously.

A Miss by Myles: Why Professor Allen is wrong to think carbon capture and storage will solve the climate crisis

Originally posted at Skeptical Science on 11 June 2013, written by Andy Skuce and rustneversleeps

A recent opinion piece in the British newspaper Mail on Sunday by University of Oxford climatescientist Myles Allen argues that the best way to combat climate change is to pass laws requiring fossil fuel producers to capture and sequester a rising proportion of the carbon dioxide emissions that the fuels produce. We argue here that such a policy, with its emphasis on carbonsequestration, would not be successful in achieving the carbon emission reductions that Allen himself advocates—for a variety of political, economic, technological and logistical reasons. A more recent article by Allen in The Guardian covers the same ground.

Nevertheless, Allen’s prescription does succeed in focussing the mind on the scale of the problem that we face in mitigating climate change.

Summary/Index

This is a very long post, so here is a clickable summary.

A good starting framework, then… Allen’s diagnosis is clear and his framing of targets in terms of cumulative emissions is unabiguous. But his prescription is flawed.

Politics There is no reason to assume a fixed emissions cap schedule would be easier to sell to the public than a carbon tax. Caps would produce greater certainty of longer-term emission reductions at the cost of uncertain economic consequences.

Economics (i): Efficiency Imposing emissions caps without allowing trading through brokers would be very inefficient. It is not clear whether Allen supports or opposes trading.

Economics (ii) Innovation by fiat? Prescribing one form of technology as the principle solution is risky. Nobody can predict how technology will evolve and what problems may emerge in future.

Economics (iii): The information conveyed by prices The cost of one technology should not be used as a basis for carbon pricing. There is a wide range of mitigation options, with highly variable prices, all with variable and uncertain potential to contribute to solutions. Experience in British Columbia shows that even a modest carbon tax can reduce emissions significantly without harming the economy.

Scaling it up to climate relevance Even promoters of aggressive deployment of carbon capture and storage (CCS) do not envision it as more than a partial contribution to mitigating climate change by 2050.

Timing and feasibility The mass of the CO2 to be sequestered is about double the mass of the fossil fuels themselves. To develop a new industry, from scratch, to capture, transport and dispose of these quantities will involve vast amounts of capital and many decades, even if it were technically possible.

Hazards The magnitude of the CO2 to be sequestered in the subsurface is such that environmental risks from leakage, aquifer contamination and induced earthquakes are likely to be much larger than those from the already contentious shale gas industry. Getting  public licence for CCS projects in inhabited areas is likely to be very difficult and time consuming.

Summing up The climate crisis is so vast that we need to throw everything we have at it. Claiming that any single technology will solve the problem can lead to complacency that the fix is simple. It isn’t.

Continue reading

World Energy Outlook 2011: “The door to 2°C is closing”

Originally posted at Skeptical Science

If we don’t change direction soon, we’ll end up where we’re heading

These words come from the Executive Summary of the World Energy Outlook 2011 (WEO11), just published by the International Energy Agency(IEA). The study incorporates the most recent data on global energy trends and policies, and investigates the economic and environmental consequences of three scenarios over the 2010 to 2035 time period. This is an important document that should be widely read but, unfortunately, the full report costs €120 for a single-user 650-page pdf.  Some key graphs and fact sheets are provided for free.

Continue reading