In Canada, our carbon tax is going up $15/ton per year, and will be $170/ton by 2030. That’s really going to hurt a lot of people, especially since Canada needs a lot of heating and almost everyone uses natural gas. ‘Turning the thermostat down a few degrees’ won’t do much when it’s -40 outside. So people won’t have much room to cut. As economists say, the demand for energy is fairly inelastic, especially in the short term.
We have an R2000 house and a couple of years ago I put in a high efficiency furnace. We have triple pane windows, etc. During the cold snap, our monthly energy bill hit almost $500, and we have some of the cheapest natural gas prices in North America. I’ve heard of people in Ontario getting $1500 energy bills. A $170 carbon tax will more than double the cost of natural gas to the consumer. Maybe triple it, once you factor in shipping and secondary price inflation.
Small businesses will be really hurt, especially the energy intensive ones like restaurants, coffee shops, etc. Tim Hortons and other such businesses will have to raise their prices significantly.
The Trudeau government plans to have a scale of rebates for some people, but that just gives them more control over the economy. By picking and choosjng who gets rebates, they can put their thumb on the scale of the economy even more. That’s bad.
The ‘social cost’ of carbon is a fictional number. There is no way to actually know it, and it depends on a whole lot of factors like the discount rate, how effective future mitigation is, how long we continue to burn carbon, what its effect will be decades down the road, what human migration patterns will be like decades from now, etc. No one knows any of these things. As a result, estimates of the ‘social cost off carbon’ start at zero and go up to hundreds of dollars per tonne.
A whole bunch of states are suing the Biden administration for using the social cost of carbon as a real number that justifies specific actions.