Federal carbon price could generate $50 billion per year, allow deep income tax cuts

February 25, 2008 OTTAWA – A new report from the David Suzuki Foundation finds a federal carbon tax or trading system would dramatically reduce greenhouse gas emissions, protect the environment and generate revenue of at least $50 billion per year by 2020 – money that could be used to spur green innovation and could greatly reduce personal income taxes.

“Millions of Canadians are taking steps each day to conserve energy, whether by taking public transit, changing their light bulbs or turning down their thermostat. These Canadians should be rewarded,” says Dr. David Suzuki. “Meanwhile, carbon-intensive industries and activities severely damage our climate at no charge to the polluter.”

“Right now, the atmosphere is treated like a free dumping ground,” added Dr. Suzuki. “This must change and there is growing support in this country with the principle that polluters must pay.”

Pricing Carbon: Saving Green - A Carbon Price to Lower Emissions, Taxes and Barriers to Green Technology outlines a series of findings that present a strong case for the federal government to introduce a carbon price that puts a fee on the emission of greenhouse gases.

“The carbon price that British Columbia introduced last week sets a very positive example for the federal government on how to seriously address climate change. Now it is Ottawa’s turn to move by putting a price on carbon at the federal level” says Dr. Mark Jaccard, economist and professor at Simon Fraser University, whose organization co-authored the report. “With the introduction of a carbon price, even a fairly high one, Canada’s economy would continue to grow rapidly,” adds Dr. Jaccard.

The Foundation’s new report asserts that:
• A phased-in carbon price would generate at least $50 billion, and as much as $100 billion, in revenue by 2020.
• The substantial government revenue generated by a carbon price could allow government to greatly reduce personal income taxes for the average Canadian taxpayer.
• Using a portion of the revenue to fund renewable energy such as wind and solar power, and to improve the energy efficiency of Canadian homes, would spur a further reduction in greenhouse gases.
• A well-designed revenue use policy would reduce the economic impact of a carbon price on those sectors and regions of Canada’s economy that rely heavily on carbon intensive activities.
• With the introduction of a carbon price, even a fairly high price of over $100 per tonne, Canada’s economy would continue to grow rapidly.

“International climate change scientists tell us we need to act now to address the effects of global warming. Economists tell us this can be accomplished by placing a dollar figure on our carbon use,” says Dr. Suzuki. “Most environmentalists, scientists and economists – and a more and more business leaders – agree that a carbon price protects our environment and safeguards Canada’s economy.”

Several countries, including Germany, Norway, the UK and Sweden have placed a price on carbon and greenhouse gas emissions have subsequently decreased. Sweden, for example, has had a carbon tax since 1991. As a result, new green technologies have come on-line and have helped reduce the country’s greenhouse gas emissions.

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The full report, Pricing Carbon: Saving Green - A Carbon Price to Lower Emissions, Taxes and Barriers to Green Technology can be found online at: http://www.davidsuzuki.org/Publications/Pricing_Carbon_Saving_Green.asp

For more information contact:
Pierre Sadik
Senior Policy Advisor
David Suzuki Foundation
Office: (613) 594-5845
Cell: (613) 799-8626

Dominic Ali
Communications Specialist
David Suzuki Foundation
Cell: (647) 203-4701