Re: [Pen-l] how about a floor under gas prices?

[Paul Phillips <phillipsp@xxxxxxx>]

Thanks to Max ahd Hans for their feedback on the distributional issue.  
First, I agree with Hans that the closer to the primary producer the tax 
is imposed, the more efficient it is.  But I think that may miss an 
important point, that the closer it hits on the primary producer, even 
if they can pass it on to the consumer, it is an added incentive to the 
producer to reduce emissions and to seek alternatives.  The whole weight 
of adjustment doesn't fall on the consumer who, in the case of northern, 
rural and agricultural consumers *have no choice* at least in the 
shortrun, since there is no alternative transportation system and for 
whom four-wheel drive trucks are a survival necessity, particularly in 
winter conditions. (I have one myself and have been forced to rely on it 
during winter driving conditions.)
    Furthermore, northern municipal governments are complaining that 
the gas tax is adding such a drain on their municipal budgets that they 
can't afford the investment for greener alternatives. i.e. the tax is 
counterproductive.  It is also adding to the cost of food both from 
local producers and also from imported produce that must come by truck 
from, primarily, the US and Mexico. etc. etc.
    Hans is absolutely right that the development of real alternatives 
requires a fundamental change in the way we organize how we live and 
produce.  But there is nothing in the BC gas tax to provide for any 
greener alternatives and, indeed, by shifting the tax burden to the 
rural and hinterland population, makes it increasingly difficult for the 
disadvantaged to finance any alternative.
    But, perhaps in the longer run, the most debilitating effect of 
this so-called carbon tax is to create cynicism in the population that a 
carbon tax is merely a tax grab for the benefit of the already 
privileged , affluent urban population.

Paul Phillips



ehrbar wrote:
> The following is a good article about the problematics Paul and Max
> have been discussing.  I highly recommend this article, it brings up
> many other points too (competitiveness, international coordination):
>
>  Smith, Stephen, Tax Instruments for Curbing CO2 Emissions, chapter 34
>  (pages 505-521) in the Handbook of Environmental and Resource
>  Economics, edited by Jeroen C.J.M. van den Bergh, Edward Elgar 1999.
>
> Smith argues for a "primary" tax on fossil fuels (crude oil, gas,
> and coal), where they are mined, extracted, or imported, as opposed
> taxing final fuels (coke, anthracite, gasoline) because
>
> (a) fewer taxable individuals, no need for fiscal supervision of the
> energy chain
>
> (b) tax authorities do not need knowledge of the carbon 'history' of
> the processing of final fuel products
>
>   


--
Paul Phillips Professor Emertus, Economics University of Manitoba Home 
and Office: 3806 - 36A st., Vernon BC, Canada. ViT 6E9 tel: 1 (250) 
558-0830 email: phillipsp@xxxxxxx
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