Climate inaction and BC’s budget

The 2010 BC Budget was a disappointment on the climate action front. Even as Premier Campbell waxed in the Globe about the impact of climate change on the 2010 Spring Games – with its sunny days, crocuses, daffodils and by the end, cherry blossoms making it fun for people on the street but a big mess up at Cypress Bowl for a number of events – the budget offered little assurance that this government still cares.

Instead, the budget better resembles the Olympic flame, whose massive size and burning cauldrons made a fitting monument to the oil and gas industry, a testament to our brazen capacity to burn fossil fuels. Subsidies to the oil and gas industry remained untouched in the budget, and in fact royalties from the sector are half of levels in previous years, in part due to royalty reductions from last August’s “oil and gas stimulus package” (like they really needed it). In addition, the budget’s transportation investment plan, 86% of provincial funds go to roads and bridges, including favoured projects like the Gateway highway expansion program and the “oil and gas rural road improvement program”.

There was some expectation that the government would announce a plan for the BC carbon tax, which hits $30 a tonne in July 2012, then hits a wall. If I was a business in BC, I would want to know the outlook post-2012 and what this meant for capital investments in the near term. But there was silence on that front, nor any expansion of the tax to cover major sectors not currently covered by the tax, including aluminum, cement, lime, and (you knew this was coming) much of the oil and gas industry.

From a climate justice perspective, more troubling is the failure to improve the low-income carbon tax credit, which more than offset the carbon tax for the bottom 40% of income earners in year one (starting July 1, 2008), and was roughly neutral in year two (July 1, 2009). The growth of the credit is not keeping up with the growth in the carbon tax, and will make the overall regime regressive as of July 1, 2010 – thus placing a greater burden on low-income folks who have done the least to contribute to the problem in the first place.

Since its inception, the carbon tax and revenue recycling regime was regressive at the top, meaning the top 20% of income earners get back more in tax cuts than they pay in carbon tax. The government’s unwavering commitment to use carbon tax revenues to fund personal and corporate tax cuts that are not needed and will have essentially no economic impact also deprives action on things that really would change behaviour, like improvements to service for public transit (the latter being a fascinating experiment and positive outcome of the Olympics). True, the government has put in funds for the Evergreen line, but hamstrung Translink’s ability to raise funds to actually get the project off the ground.

So overall, we need some regime change on the climate front if BC is to live up to its rhetoric and awards from environmental groups.

The budget does breath some new life into LiveSmart, a program for energy efficiency upgrades that ran out of money last year when it was oversubscribed. Too successful for its own good, the program withered. The budget provides new money of $35 million over three years, which is better than nothing but rather small. It is a lost opportunity given that unemployment rates are double what they were a year ago, and this work develops green jobs. There are some flaws in the program that still need to be fixed; for example, it encourages use of natural gas furnaces and hot water heaters that produce the greenhouse gas carbon dioxide when used.

In addition, the budget commits $100 million over three years to vaguely defined “climate action and clean energy”, which is linked to an upcoming Clean Energy Act to be tabled this sitting that has many concerned about the province running roughshod over local interests to ramp up private power production for export to the US (perhaps in conjunction with a new deal signed by Campbell and Schwartzenegger during the Olympics). The budget states that this money will be used to support investments (read: subsidize private sector) in biofuel production, new electricity generation and “infrastructure to support cleaner transportation choices”. While some of this may be a useful contribution, we will have to wait for more details when the new legislation is tabled.

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