Stephane Dion has proposed a Carbon Tax of $15 Billion (or so), that will be offset by reductions in personal and corporate taxes. This will fail to have any significant effect on emissions of greenhouse gases (i.e. CO2). The reason is that a $40 / t tax amounts to about 10 cents a litre on diesel fuel. And since he won’t apply it to gasoline it won’t affect that price.
The price of diesel has risen by a factor of more than 2 in the last 2 years, and this has had little effect on consumption. It has had an effect on the price of everything we buy, including food – because all these things require transportation by train, truck or ship. All of which will have to pay the carbon tax.
So a $0.10 per litre increase in taxes will pale in comparison to the price increases due to market forces, and simply add to the inflation challenges of our economy. But they will also have little or no effect on the consumption of energy, or on the subsequent emissions.