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Originally Posted by lozen
So your saying increasing carbon tax will not have an effect on cost of living?
Correct. Well, it will have some marginal 'second order' effects, but the primary mechanism is that the net cost to taxpayers of the carbon tax is net returned to tax payers.
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Food will cost more, Heating your house will cost more and driving to work will cost more.
Also correct. And you get rebate back, so that the net cost is, on average, zero. As in yes, the price when you fill up your tank of gas is more, but that money is all being funneled back into Canadians. Crucially, it comes out unequally (some will use more carbon intensive things and pay more tax) but goes back to canadians equally, we all get the same amount back, which is what provides the incentive mechanism to lower your carbon usage.
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If you use no carbon why would you get a rebate? Why not just rebate the folks that have no alternative but to use carbon and are lower income?
The goal is to incentivize people to use less carbon. So there is both a carrot and a stick here. If you use a lot of carbon, you pay a lot of tax. But if you use very little carbon, you end up a net winner! You make money under this scheme! This incentivizes people to use less carbon.
At the end of the day, if your carbon reduction plan dosen't incentivize people reducing their carbon, it isn't going to work.
The carbon tax is one among many factors in the economy. So when there are underlying economic factors (like a reviving economy charging back after a pandemic, or increased oil production, or a summer where people drive more, etc etc etc) then the net carbon usage can rise. That doesn't disprove the carbon tax. The carbon tax can still be working splendidly meaning there is less carbon used than there would have been otherwise, it just means it wasn't sufficient. Thankfully the carbon tax steadily rises each year until 2030. This will increasingly put downward pressure. Unless, of course, the conservatives get elected as they have a far lower $50 cap per tonne than the Liberals I believe $170, and that's if there plan even works (which I doubt).