Canada Suspends New Carbon Tax Due To Popular Opposition
Canada Suspends New Carbon Tax Due To Popular Opposition | OilPrice.com
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Canada’s federal government has suspended a new carbon tax targeting heating oil after a wave of popular opposition from the country’s eastern provinces where oil is an essential source of heating.
“We are switching to heat pumps off home heating oil, as a region in Atlantic Canada and as a country,” Prime Minister Justin Trudeau said but after he announced a three-year postponement in the implementation of the tax.
When it does get implemented, the new carbon tax will affect 2.6 million people in Canada’s eastern provinces.
Canada already has carbon taxes on fuels as part of its efforts to reduce carbon dioxide emissions by between 40% and 45% from 2005 levels by 2030. The additional tax burden has contributed to inflation that has made many Canadians struggle to make ends meet.
A recent survey from Postmedia-Ledger found that 55% of Canadians would rather the carbon tax be reduced while 37% wanted to see it go altogether. Only 18% were okay with the government’s current policy of raising the price of CO2 every year.
At the moment, a ton of carbon dioxide costs C$65 per ton, which is equal to some $47, but plans are to have this rise to C$130 per ton, or $94, by 2030.
Commenting on his government’s decision to postpone the heating oil carbon tax, Trudeau told media "This is an important moment where we're adjusting policies so that they have the right outcome," Trudeau told reporters in Ottawa. "We are doubling down on our fight against climate change ... (while) we are supporting Canadians," as quoted by Reuters.
Bloomberg noted that the move may be related to the Liberals’ drop in the polls, attributable to the rising cost of living across Canada, which in turn can be causally linked to higher energy costs, including because of the rising carbon tax.
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By Irina Slav for Oilprice.com
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Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
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- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”