'You will need a carbon price'

The Canadian president of Royal Dutch Shell says carbon capture and storage—in which the Harper government has invested heavily—won’t be successful unless a price is put on carbon.

A senior oil executive is urging federal and provincial governments to put a significant price on carbon dioxide to encourage the industry to reduce emissions even as it increases production and accesses new and growing markets. In an interview Monday, Royal Dutch Shell PLC’s Canadian president, Lorraine Mitchelmore, said the country needs to address what often appear to be the competing goals of improved environmental performance and greater output of oil and gas, and “carbon management” must be part of that approach … 

Ms. Mitchelmore said CCS technology won’t be widely adopted unless there is a price on carbon – either through a tax, a cap-and-trade system or regulations on emissions. “Right now it would need a real significant price, but we see that with the learning and the technology you bring to bear, we see that coming down. But you will need a carbon price,” Ms. Mitchelmore said in an interview from Charlottetown, where she had addressed the federal, provincial and territorial energy ministers.

Elizabeth May quips. The CEO of Royal Dutch Shell made similar comments to John Geddes in June.

Michael Vaughan points to an MIT study which recommends the United States adopt a carbon tax.

The MIT study found that taxing carbon at $20 a ton in the U.S. would generate $1.5-trillion in revenue in a 10-year period, which would reduce corporate and personal income taxes, maintain social services spending and reduce the deficit. “With the carbon tax there are virtually no serious trade-offs. Our analysis shows the overall economy improves, taxes are lower and pollution emissions are reduced,” said John M. Reilly, co-director of MIT’s Joint Program on the Science and Policy of Global Change. The study said the carbon tax would lower pollution by 20 per cent by 2050 and prevent oil imports from rising. It would also, most importantly, shift energy markets to clean technology.

Stephane Dion’s carbon tax proposal would have started at $10 per tonne and risen to $40 per tonne. Alberta’s carbon tax is $15 per tonne. British Columbia’s carbon tax is capped at $30 per tonne. The MIT proposal would start at $20 per tonne and rise four percent each year.

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