Income taxes are easy enough to understand — the government gets a percentage of your pay each year.
Sales taxes are fairly easy to follow, too — an extra charge gets added on when you buy a TV or dishwasher.
Carbon taxes, however, aren't so simple. Yet they are a major buzzword in the current federal election campaign, and depending on your political perspective, a saviour in the face of the dire consequences of climate change or just a shameless way to fill government coffers.
So what is a carbon tax?
In basic terms, it is a tax on greenhouse gas emissions levied with the aim of reducing pollution to combat climate change.
Those emissions spewing from exhaust pipes or industrial smokestacks are made up primarily of carbon dioxide, which is produced when fossil fuels containing carbon — such as coal, natural gas or diesel — are burned.
"It's a really important tool for fighting climate change," says Clare Demerse, a senior policy analyst with the Pembina Institute. "It's a way to make sure pollution carries a cost."
And, so the theory goes, it's a way to encourage individuals and businesses to change their behaviour, making decisions that reduce pollution, whether those decisions affect what you drive, how you heat or cool your home or how the oilsands develop in Alberta.
The tax is described in terms of a dollar value per tonne of gas produced. Right now, the Pembina Institute and the David Suzuki Foundation say that Canada needs a carbon tax of $30/tonne immediately, at least $50/tonne by 2015 and $75/tonne by 2020 for the country to do its part in cutting greenhouse gas pollution.
But that doesn't mean anyone goes around weighing what comes out of those smokestacks at factories.
"They're usually measured indirectly," says Demerse.
For every measure of a fossil fuel — e.g. a litre of natural gas — there's an associated level of emissions. Some fuels, like coal, have more than others, such as natural gas.
According to carbontax.org, a U.S. non-profit, non-governmental organization that advocates for revenue-neutral carbon taxes, a British thermal unit of heat energy from burning coal produces 30 per cent more carbon dioxide than a Btu from oil, and 80 per cent more than from natural gas. A carbon tax would be based on those differences, with more tax on applied on coal than oil, for example.
So what are the advantages of a carbon tax?
A carbon tax can be applied by a government with little extra effort, using existing fuel tax arrangements.
"It's economy-wide in its impact," says Mark Winfield, a political scientist and professor of environmental studies at York University in Toronto.
That broad scope is important, he says, because of the nature of the climate change problem. "You really need something that affects the economy as a whole."
A carbon tax also gives people some power to choose what role they want to play in fighting climate change. Maybe they will eventually buy a smaller vehicle, or retrofit their home to be more energy-efficient.
"It allows consumers to make their own choices of how they want to respond," says Winfield, noting that can be more effective in the long term than if the government tells you exactly what to do.
Of course, consumers may also choose not to buy a smaller vehicle, or they may be willing to pay higher prices for gasoline — leaving economists and politicians with the task of determining precisely what level of carbon tax to levy to provoke the change they are hoping for.
There can also be a political plus to introducing a carbon tax.
"It sends a signal throughout the economy that you're serious about doing something about greenhouse gas emissions," says Winfield.
What about the drawbacks of a carbon tax?
Depending on how the tax is introduced, and whether it is accompanied by tax cuts, financial assistance for people with lower incomes or other incentives to encourage consumers to make choices that reduce pollution, its costs may not be distributed evenly in the economy.
"If it's just a carbon tax … those with less discretionary income may be hit harder," says Winfield.
It can also be difficult to determine exactly what level to set the tax at to get people to change their behaviour.
A carbon tax alone is also generally not a magic bullet for fighting climate change.
"It needs to be combined with other regulatory policies," says Demerse, citing emission reduction targets as an example.
What do critics of a carbon tax say?
Opposition to carbon taxes includes suggestions that they are merely a cash grab to bolster government coffers and will just push jobs and business to cheaper jurisdictions.
In Alberta, for example, where oil and gas production are such a strong segment of the economy, there is little appetite for any kind of across-the-board carbon tax.
While the province does put a price of $15 a tonne on carbon emissions beyond a set target, there has also been strong opposition to the federal Liberal Green Shift plan that includes a carbon tax, which would be directed toward several fossil fuels, but not gasoline.
"This plan doesn't go after the automobile, but goes right after the way we look after the heating of our home," provincial Finance Minister Iris Evans said in an interview with the Edmonton Journal.
"So you look at all of those with the luxury to be powered by hydro and you know they're not going to pay the penalty, Albertans will."
The reference here, of course, is that some provinces, notably Quebec, Manitoba, B.C., and, to a lesser degree, Ontario, generate the bulk of their electricity from hydro whereas Alberta depends largely on coal and natural gas.
Evans told the Journal the Liberal plan is more a "wealth shift" than a green shift.
"Potentially massive amounts of dollars could leave Alberta. Even industry could. There isn't any bright light in any of this. It's not good for any fossil fuels, anything we derive in that fashion. Do you see any point in this for the coal sector?"
So what has happened where carbon taxes have been introduced?
Carbon taxes have been introduced in several jurisdictions in North America and around the world. Sweden's experience beginning about 20 years ago is often cited as an example. Closer to home, British Columbia and Quebec have also introduced forms of carbon taxes.
"We have precedents within Canada and the European Union," says Winfield. "Economic catastrophe has not ensued."
That's not to say they have been warmly welcomed everywhere. A proposal in New Zealand was withdrawn after the government decided a carbon tax wouldn't reduce emissions enough to justify it.
So what's a voter to do when a candidate starts talking about a carbon tax?
Try to get beyond any rhetoric, and find out exactly what's involved in a party's proposal regarding climate change. That may not be easy, given the complexity of the topic.
"You need to think about this in big-picture terms," says Winfield, noting this is an issue that's bigger than we're used to seeing in an election campaign.
"It deserves more reflection than a knee-jerk response."
If a candidate says a carbon tax is a bad idea, then Winfield suggests asking what he or she considers would be a better way to deal with climate change, given the very serious consequences of the problem.
"You can't get away with just saying No to a carbon tax. You need to propose alternatives."