Carbon Tax Will Take 2% Off Alberta Household Incomes: Economist

Why Global Carbon Prices Need to Rise

A sweeping carbon tax in the oil-rich Canadian province of Alberta will hit residents harder than similar environmental measures in other parts of the country, an economist said.

The tax of C$30 ($22.96) per ton, which comes into effect next year, will cost Albertans 1.5 percent to 2 percent of their household incomes, McGill University’s Chris Ragan said Friday during a Bloomberg Television interview. That’s higher than the impacts of carbon-pricing programs in other provinces because of Alberta’s abundance of oil-sands bitumen and coal-fired electrical plants, Ragan said.

“The whole point of a carbon price is to get people and firms to substitute away from carbon intensive goods and services,” said Ragan, chairman of Canada’s Ecofiscal Commission. “So you can’t really have a carbon price and not have an impact.”

The economy of Alberta, Canada’s biggest producer of oil and gas, is already suffering under sagging crude prices. The province’s carbon-tax initiative will divert some of the revenue back to taxpayers, in an effort to soften the blow to household incomes.

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