Energy taxes kill jobs and leaves seniors shivering in the dark

In my article in the Province newspaper today, I talk about Denmark's experience with the carbon tax. Denmark imposed high carbon taxes and the result was manufacturing job losses and some of the highest energy costs in Europe.

 

The Danish government started taxing energy with a carbon tax in 1991. By 1998, manufacturers started closing because of high energy prices. Danish carbon tax revenues declined, as did the number of manufacturing jobs.

By 2001, economic growth had slowed to almost zero. Danes making over CAD$50,000 paid 59 percent of their income in taxes and also had to cope with record high electricity prices.  That year, the sitting government was thrown out of office. The incoming government promised a tax freeze, followed by tax reductions – including reductions to the carbon tax.

All the hardship did reduce Denmark's greenhouse gas emissions, the purported goal of carbon taxes.  Overall, emissions fell by 10 percent between 1990 and 2005, but the country’s manufacturing employment dropped by 25 percent.  So while a carbon tax can reduce emissions, it is at the cost of jobs and a population struggling to pay its heating costs.