Why I’m giving away my carbon-tax rebate

Image: Smokestacks © Dori via Wikimedia.org CC BY-SA 3.0

Canada has a new carbon tax – far too modest, but it’s a start.  Its implementation is an awkward mosaic across the country, but in my province of New Brunswick, it’s a federal tax* that’s coupled with a rebate (or “climate action incentive”, as it’s confusing called).

The rebate, appearing as a tax credit, on my 2018 income tax return.

Here’s (roughly) how this works: the tax is levied on fuels (etc), so what I pay scales with my carbon footprint; but revenues are largely returned to taxpayers via a yearly rebate of fixed amount.  This year, the rebate for my family is $224, and the amounts are set so that most taxpayer get a little more back than they pay in carbon tax.  The tax incentivizes (not strongly enough!) carbon-footprint reductions, while the rebate softens the blow without removing the incentive.  (If you’re tempted to think the rebate spoils the incentive, there’s a good behavioural-economic analysis here; the scheme’s workings are subtle but clever.)

But I don’t want my rebate.

The carbon-tax-with-rebate system may be what was politically possible.**  But it isn’t what I’d like to see.  Ultimately, our climate-change challenge will need not just a set of personal incentives to reduce carbon footprints but also centralized programs to take larger-scale action – whether that be fledgling-industry subsidies, direct spending on large-scale decarbonisation projects, or whatever.  If it were politically possible, I wouldn’t use the carbon-tax revenues to bribe voters into accepting the incentivization.   Instead, I’d use them to supplement the incentivization with aggressive direct action by government (which is to say, by all of us together, which is all the word “government” means).

I can’t make that happen, but I can put my own rebate towards those goals.  I resolved, therefore, that when I got my rebate I’d donate it to some program or organization focused on the battle against climate change.  And of course, I’d like to send my $224 where it will make the biggest impact on Earth’s CO2 trajectory.  I have lots of choices: a simple purchase of carbon offsets; an investment in a green-technology startup; a donation to a climate-friendly political party; a donation to climate research, education, or action either at home or abroad… it was looking easy to be paralyzed by choice.  Fortunately, I’m not the first to ask about good targets for climate-change donations.  A while back, Kim Nicholas sparked a Twitter thread on the topic, and from that thread I could glean some good suggestions.  I settled, for this year, on Project Drawdown and sent off my $224.

I’ll make two important points about my choice.  First, it’s just my own choice; it’s not an endorsement (and if you have alternative suggestions for me or for others, by all means leave them in the Replies).  Second, it’s of course possible that I haven’t picked the very best destination for my rebate.  That’s OK – I refuse to let uncertainty about the perfect be the enemy of the good.

Is my carbon-tax-rebate donation enough action for me?  No.  It’s neither all I am doing nor all I aspire to do (see Brett Favaro’s excellent book, The Carbon Code, for some further ideas).  But it’s one thing I can do that feels right.

What about you?  Are you in a jurisdiction with a similar tax-and-rebate scheme?  If you are, will you join me (with your own choice for where you donate, of course)?

© Stephen Heard  May 28, 2019


*^Because my province refused to implement its own carbon tax, the federal government imposed a backstop.  Some other provinces have their own carbon taxes that vary in detail; others, like mine, have their heads buried firmly in the sand.

**^Although the usual collection of climate-change deniers and so-called populist right-wingers are objecting noisily but incoherently, of course.

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4 thoughts on “Why I’m giving away my carbon-tax rebate

  1. Michael J. Wiener

    That’s an interesting idea. I just bought an electric car for similar reasons. Battery technology is still a little too expensive for electric cars to win on total cost of ownership, but it’s getting close. I see the excess I paid as my small contribution. The quiet acceleration might have played a role in my decision too.

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    1. ScientistSeesSquirrel Post author

      That was exactly my rationale for buying a hybrid that I couldn’t quite justify on strict dollar values (because we don’t drive enough). The “excess” was an investment in a fledgling industry. Our next car won’t have a gas tank, for sure.

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      1. Lee

        Agreed, Steve and Michael – your car examples apply to us as well when we paid the extra dollars for a hybrid in 2016 (electric was not quite there at the time). For personal/family carbon footprint offsetting, have a look at Gold Standard https://www.goldstandard.org/ although Project Drawdown looks great too.

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        Reply
  2. Eric Lamb

    I like this idea as well. I am in another province that has refused to implement a local strategy. Given that one of our biggest issues in Saskatchewan is very slow transition away from coal electricity, I would much rather see this money funding that transition, or other similar initiatives.

    That said, I chose to put the money against my mortgage. We are paying off the cost of the photovoltaic system on our house, so it is (sort of) going to the same purpose.

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