Guest Post by Willis Eschenbach
Supporters of the British Columbia (Canada) carbon-based energy tax that I discussed in my last post have made claims that the data shows this tax was a success … so being a suspicious-type fellow, I thought I’d take a look at the data myself. I didn’t figure the tax was having much effect, but I was prepared to find anything. Reality’s funny that way, I like not knowing which bush hides the rabbit … anyhow, here’s a typical claim:
MOTOR GASOLINE (DRIVING)
The above figures show changes in overall use of all petroleum fuel products (subject to the carbon tax). To gain some insights specifically into how the carbon tax has affected the behaviour of drivers, one can examine just the changes in motor gasoline consumption (one component of the overall fuel use numbers). Since 2008, per capita gasoline use in BC has declined by 7.3% more than in the rest of Canada (Table 4) – a substantial difference. Gasoline use in BC was already declining faster than in the rest of Canada from 2000-2007 (see Figure 4).
The tax covers all carbon-based fuels, heating fuel, jet fuel, kerosene, natural gas, all of them. Data is unavailable for some of them, so I have looked at the consumption of the highway fuels, gasoline and diesel, to see if the tax has any effect on how people are driving up in the frozen North.
Statistics Canada has an excellent website, from which I got most of my data about the fuel use. First, here are the raw changes in per capita diesel and gasoline use (combined) by Province for the years 1993-2011. This analysis is only the gasoline and diesel used on the roads, not the use of those fuel for off-road vehicles and farm tractors and the like. (Note that off-road and farming fuel, and indeed fuels for all purposes and users, are all subject to the BC carbon-based energy tax.)
Figure 1. Per capita Canadian diesel plus gasoline use by Province. Only fuels used on the highway are counted. Thick red and black lines show British Columbia and Canadian average per capita fuel use. Nunavut and Northwest Territories are not included due to lack of data for the earlier years, before Nunavut was created. DATA SOURCE
Now that’s interesting, but it doesn’t really allow us to look at the subtle year-to-year changes. For that we need to look at the percentage changes in emissions by province, to see who is going up and who is going down.
In looking at a percentage change in anything, the first question of interest is, percentage change from what starting point? Because the tax was instituted in 2008, I looked at the percentage change from that time. Figure 2 shows that result, and given the claims of the proponents of the tax, it’s quite funny … well, it’s funny except if you live in BC, I guess when the joke’s on you it kind of loses its humor. Anyhow, here’s the percentage change in per capita use of highway fuels by province:
Figure 2. Percentage change in fuel use, with the year 2008 used as the base from which the percentages are calculated. Blue line shows the corresponding percentage change in the real (inflation-adjusted) Canadian GDP. 2011 is the most recent year for which StatCan has data.
The first thing that stands out is what I found in my analysis of the US driving habits—Americans drive more miles in good economic times, and cut back on the driving in tough economic times. Similarly, the highway fuel used in both British Columbia and also the rest of Canada has moved roughly in parallel with the national economic situation.
The next thing I noticed was that from 1993 to 2008, BC had the slowest growth in highway fuel use of all of the Provinces.
Next, the changes in highway fuel use after the imposition of the tax are interesting. Figure 3 shows a closeup of Figure 2, highlighting the recent period from 2004 to 2011.
Figure 3. Closeup of Figure 2, showing the post-tax changes in road-fuel use. The BC carbon-based energy tax was instituted in 2008.
So … just like the rest of Canada (thick black line), BC road fuel use dropped from 2004 to 2008, when the BC tax was instituted … except it was dropping faster than the national average.
Again just like the rest of Canada, the BC road fuel use bottomed out in 2009, the year following the imposition of the carbon based energy tax. I can only assume that this is related to the blue line, showing the real GDP for Canada.
And just like the rest of Canada, since then British Columbia road fuel use has risen to the end of the record … except it’s risen faster than the national average.
Now here’s the funny part. From 2004 to the tax year of 2008, BC road fuel use was showing nearly the fastest decrease in fuel use in the country. Fuel use dropped about three times as much as the rest of Canada during that period. That was before the tax.
After the tax, BC road fuel use dropped, but for only one year. So did the rest of Canada, and the US, showing that the drop was at least in part due to the global financial meltdown.
And since 2009, BC is tied with the Yukon territory and Newfoundland/Labrador for the fastest increase in fuel use in the country. Highway fuel use rose five times faster in BC than in the rest of Canada since 2009.
Finally, since 2008 when the carbon-based energy tax was imposed, energy use on the road has risen in BC, not fallen. And not only has it risen, since the tax took effect BC has risen faster than all but three of the other provinces.
Can we say that the carbon-based energy tax hasn’t changed fuel use in BC? Nope, all I’ve looked at is road fuel … but fuel use on the highways of BC sure hasn’t changed. Well, that’s not exactly true.
Before the tax, per capita road fuel use in BC was dropping faster than almost all the provinces.
…
After the tax, per capita road fuel use in BC is increasing faster than almost all the provinces.
…
So actually, yes, I’d say I was wrong, the tax has had an effect on BC road fuel use … but likely not the one expected by the promoters.
w.
PS—you may recall that up top, the promoters extolled the drop in gasoline used for road fuel in British Columbia … why didn’t I find that result? Why do I show an increase?
Well, it’s because I show all the highway fuel used, not just gasoline. And although there was a small decrease in gasoline use in BC, there was a larger increase in diesel use. And as a result, total BC road fuel use is not 7.3% less than the rest of Canada as they would lead you to believe by omitting the diesel figures—BC road fuel use has increased by 4.2% more than the rest of Canada. Like I say, it pays to be really suspicious with statements from folks like that, single issue fanatics.
PPS—In my previous post on the BC carbon-based energy tax, I said I wanted to discuss the (lack of) benefits, the costs, and the results of the tax. That post showed that the maximum possible benefit of the BC tax is a cooling of three thousandths of a degree (0.003°C) after fifty years. This post is about a curious result of the tax, the fact that BC highway fuel use (gas plus diesel) was dropping before the tax, and has increased since then by much more than the rest of Canada. The next post will discuss the costs of the tax, and why “revenue neutral” isn’t.
NOTE: This is one of a four-part series on the BC carbon-based energy tax. The parts are:
British Columbia, British Utopia
Fuel on the Highway in British Pre-Columbia
Why Revenue Neutral Isn’t, and Other Costs of the BC Tax
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They have significant cojones to engage you in any such debate….but its always good to read your stuff. Its humbling…and entertaining.
Willis: BC is not the frozen north. We affectionately call it the “Left Coast” for its politics, the “wet coast” for its weather, and the “land of newly weds, nearly deads and pot heads”,for its mix of tourists, retirees and local agrarian activity.
Willis wrote, ” … I show all the highway fuel used, not just gasoline. And although there was a small decrease in gasoline use in BC, there was a larger increase in diesel use.”
<a href="http://en.wikipedia.org/wiki/Substitute_good"<Wikipedia …
In economics, one way two or more goods are classified is by examining the relationship of the demand schedules when the price of one good changes. This relationship between demand schedules leads to classification of goods as either substitutes or complements. Substitute goods are goods which, as a result of changed conditions, may replace each other in use (or consumption)
<a href="http://en.wikipedia.org/wiki/Lie#Lying_by_omission"<Wikipedia again …
Also known as a continuing misrepresentation, a lie by omission occurs when an important fact is left out in order to foster a misconception.
What Willis has done here reminds me of the work done by the authors of Freakonomics.
I realize that the book is not without its shortcomings but Freakonomics should be required reading for all high school students. The book clearly demonstrates that we should be skeptical about all claims based on statistics. It goes beyond basic cynicism by showing us the kind of questions we should be asking when faced with statistical evidence.
Many educators push media literacy programs which are intended to toughen students against the barrage of propaganda they face daily. As far as I can tell, none of those programs deal with the kind of analysis Willis has demonstrated here. They should. If more people could muster that kind of thinking, the AWG alarmists would have a much harder time pushing their crap.
Looks like the Yukon is the place to be!
How green is your electric car?
Here is something on renewable energy use failure over the years.
Willis: This writer in BC agress with you. He even goes a step further, and says that BC has reduced emissions LESS than the rest of Canada.
http://blogs.theprovince.com/2012/10/11/guest-column-northern-b-c-has-no-love-for-the-carbon-tax/
Total emissions, I should have stated, not just emissions from highway use.
Of course BC is the Frozen North, haven’t you ever see ice caps on mountains up here? Haven’t you ever been to the southern USA? So yes we in BC are in the frozen north Willis. Yes we live in Igloo’s too by the way. [;-)]
Excellent set of articles Willis, thanks. Hopefully your analysis can bring some logical and rationality and help revoke this blatant CO2 Tax Theft by the government cult members up here in the Left Coast of the Frozen North. I am skeptical however since it’s really a placate the anti-green-co2 eco-terrorists up here and the pro-business Liberal Party likely won’t take the chance of pissing off the Left Coastists by revoking this pernicious irrational tax grab. Also with gas prices reaching $1.49 per liter yesterday why would they remove such a lucrative and growing source of tax theft revenues?
pwl says:
July 12, 2013 at 5:19 am
“Also with gas prices reaching $1.49 per liter yesterday why would they remove such a lucrative and growing source of tax theft revenues?”
For gawd’s man. That’s almost $6.00/gal. Socialism ain’t cheap.
Here in Alberta gasoline is about $1.12 per litre [4litres ~ 1US gallon]
Thanks, Willis. An excellent reply, and an enjoyable read, as always.
To me a tax on an essential service or commodity is ineffective because we cannot do without it. Our inability to pay for the item is the greatest incentive to cut back. or seek alternate cheaper options .Public transportation in a huge country like Canada would be very expensive because of the distances. Carbon tax has become just another generator of revenue for the government that liberally minded public seems to support falsely.thinking that it will do some good for the environment.
The Canadian government would call this a success because they imposed a per unit tax on fossil fuel and the amount of fossil fuel sold went up. The government now as more revenue to redistribute. If Canadian politicians are like U.S. politicians then they only give lip service to CO2 reduction. They only want to generate funds they can use to reward their constituents and donors.
I don’t have any hard numbers, but I recently visited relatives in northwest Washington. They report that gas stations close to British Columbia do a brisk business selling gas to Canadians. The same goes for various other commodities that are taxed or subsidized differently on the two sides of the border. This is probably not a big enough effect to impact Willis’ analysis, but people do naturally try to get the best prices, even if it mean occasional trips to other cities/states/countries.
Raise the price of gasoline high enough and people will start to conserve. But the new price has to be high enough. If the price of gasoline is raised through taxes, but If the new price isn’t high enough to produce any kind of substantial reduction in consumption, then the true function of the tax is merely to raise revenue for the state, not to modify the public’s gasoline consumption choices.
Is there any country on this planet for sane people to live? Western civilization countries need not apply.
One must remember as well that, similar to per capita fuel usage comparison between countries, the vast majority of the population of BC lives in the Fraser Valley, a 25 by 50 km corner in the SW portion of BC. Of course BC will have one of the smallest per capita fuel usages in Canada.
As well, in the run up to the 2010 Winter Olympics, BC puts major money into public transit, getting more cars off the road supposedly.
Willis, taxes in Canada are only for one thing, and it has nothing to do with saving the planet. It always has to do with filling the coffers of governments who run continued deficits. You should include provincial deficit numbers in your graphs.
YFNWG says:
July 12, 2013 at 6:38 am
Of course BC will have one of the smallest per capita fuel usages in Canada.
============
Most of the people in BC spend their time idling in traffic jams, as part of the government’s plan to encourage people to take transit. Cars burn less fuel at idle than actually going from place to place.
If taxes increase, then presumably I would have to work more in order to keep my income reasonably the same. Thus, would it not be fair to expect an increase in taxes to cause an increase in emissions..? (whenever I am not relaxing on the couch, I am pretty much out there “emitting” — though my wife would probably like to point out that I emit gases when on the couch as well)
BC government must be overjoyed! Usually when a “sin” is taxed or the taxes are raised, the use of the “sin” drops so the total revenue that the government sees remains the same or maybe even drops. In this case they (the guberment) got their tax and usage went up meaning even more money for bloated government to waste….and that’s what this is really all about. More revenue for government! It’s a great scam. Who’s going to say no to a tax in the spirit to save the planet?
That post showed that the maximum possible benefit of the BC tax is a cooling of three thousandths of a degree (0.003°C) after fifty years.
Why do we continue to give credence to the IPCC and other warmists that CO2 warms globally?
That carbon tax in BC makes me laugh. BCers will do anything to keep up with California.
When that BC carbon tax started a couple of years ago, they said that the rest of Canada would follow suit. It didn’t. BC is the only province with the carbon tax. Suckers.
Just another in a long series of carbon related lies, and BCers fall for them every time. Another reason why I don’t live there anymore.