Carbon trust’s surplus to climb past $ 30 million
Liberals examine pricing as critics call for Pacifi c Carbon Trust to be axed
The Pacific Carbon Trust’s growing surplus is expected to climb to more than $ 30 million, further fuelling calls from critics to shut down the controversial Crown corporation.
Under the system created in 2009, hospitals, schools and universities are forced to pay into the trust as compensation for their carbon emissions. This allows the B. C. government to claim the public sector is “carbon neutral.”
The trust ( PCT) uses the public money to help finance carbon reduction improvements made by private companies.
The PCT’s surplus is increasing because the public sector is charged a much higher price for emitting carbon ($ 25 per tonne) than is paid to the forestry and energy companies for the carbon reduction credits ($ 11.30 per tonne on average in 2012).
“This continues to be a shell game for government, where they overcharge their own agencies to buy these carbon credits,” said Canadian Taxpayers Federation B. C. spokesman Jordan Bateman.
He said the mounting surplus is particularly worrisome. Bateman agrees with critics who charge the carbon trading system simply takes dollars away from cash- strapped public institutions and gives it to corporations that might have made improvements without any financial help.
“The best solution is always the simplest — just kill the program altogether. Leave that money in the classrooms and operating rooms of British Columbia,” said Bateman.
Facing criticism last year over its carbon trading system, particularly from school districts, the government made some adjustments.
In April 2012, the government said it would set aside $ 5 million a year in grants for carbon reduction projects in schools, about the same amount they paid yearly in carbon penalties.
Spending in 25 school districts was approved this year. For example, R. C. Palmer secondary school in Richmond received $ 500,000 to help install a more efficient heat exchange, and the Vancouver school district is getting $ 100,000 to buy electric cars.
There are more changes to come.
Five months ago, the Liberals promised a review of carbon pricing and the PCT’s growing surplus.
The government said options it would consider include lowering the cost of carbon offsets to the public sector, reinvesting the surplus into other programs or retaining the surplus to help balance the budget.
After the Liberals’ surprise election win, new Environment Minister Mary Polak was also instructed by Premier Christy Clark in June to review the Pacific Carbon Trust and provide reform options.
Polak was not available for an interview Wednesday or Thursday.
Ministry of environment officials issued a brief statement by email Wednesday, stating “The review is underway.”
During the May election campaign, the New Democrats had called for the PCT to be eliminated.
NDP environment critic Spencer Chandra Herbert says the mounting PCT surplus is a scandal.
“Right now, the ( Pacific Carbon Trust) is so obviously failing that I don’t know what kind of reform ( Polak) can propose that’s not going to continue to harm universities, hospitals, the public sector, and enrich the private sector, as well as the Pacific Carbon Trust itself,” Herbert said.
In 2012, universities, hospitals, schools and other government bodies had to pay more than $ 18.8 million for their carbon emissions.
Health authorities paid $ 5.71 million into the trust, while school districts paid $ 4.51 million and universities and colleges paid $ 3.77 million.
According to a 2012 carbon price list released Tuesday by the PCT, companies were paid $ 8.7 million. The price difference provided a $ 10- million benefit to the PCT, some of which was eaten up by administrative costs but some of which accumulates as a surplus.
In 2012, the biggest carbon credit payouts went to two First Nations forestry projects, both on B. C.’ s mid- coast: the Great Bear Initiative ($ 2.7 million) and the Nanwakolas Carbon Credit Ltd. Partnership ($ 1.35 million). Calgary- based oil and gas company ARC Resources received $ 1.1 million, while Canfor Pulp received $ 843,435 for reducing carbon emissions.
In a damning report delivered at the end of March, B. C. auditor general John Doyle stated the B. C. government did not reach its goal of carbon neutrality in 2010 — the year under examination — because the carbon offsets it purchased that year were not credible. The Liberals dismissed Doyle’s audit as flawed.