There are basically two ways to put a more appropriate price on carbon: carbon tax or by implementing a cap and trade system.
Both methods generate revenue that can then be recycled to enable us to change our behaviour, technology, systems, and infrastructure so that we emit less greenhouse gases (GHG) every day.
A carbon tax has the consumer of a fossil fuel pay tax to the government. The rate of that tax for each fuel is calculated based on the GHG emissions released by the burning of that fuel.
Key advantages of a carbon tax as compared to cap and trade include these aspects:
- easy for consumers to see and to understand
- easier and quicker for governments to implement
- relatively low administrative overhead
The following table shows the impact various carbon prices would have on the price of fossil fuels that Manitobans typically buy.
|Cost per tonne CO2e||Additional cost per litre gasoline||Additional cost per litre diesel fuel||Additional cost per m3 natural gas|
|$20||4.49 ¢/L||5.35 ¢/L||3.84 ¢/m3|
|$30||6.73 ¢/L||8.03¢/L||5.76 ¢/m3|
|$100||22.5 ¢/L||26.8 ¢/L||19.2 ¢/m3|
|$200||44.9 ¢/L||53.5 ¢/L||38.4 ¢/m3|
A Simon Frazer University study from 2016 indicated that, in order to achieve the 2030 Harper target, a Canada-wide carbon price starting at $30 / tonne in 2017 must jump $10 each year to reach $160 in 2030 if oil sands are allowed to expand to the limit set by the Alberta government.