VICTORIA – B.C.’s carbon emission trading plan died last week at the age of four. No service was announced.

The end came as the B.C. capital hosted politicians from neighbouring U.S. states and western provinces for their annual economic conference. Washington, Oregon, Montana, Utah, Arizona and New Mexico followed through with plans to withdraw from the Western Climate Initiative, leaving California, B.C., and theoretically Manitoba, Ontario and Quebec to come up with a trading system to put further costs on greenhouse gas emissions.

Fossil fuel kingpins Alberta and Saskatchewan wanted nothing to do with the WCI from the beginning, when it set a goal of 15-per-cent reduction in emissions by 2020.

This leaves B.C. as the only jurisdiction in North America with a carbon tax, and an emission reduction target twice as ambitious – 33 per cent by 2020. Because of that tax, all B.C.’s border states and provinces have an economic advantage for emitting industries. And with natural gas development booming and population growing, B.C.’s emissions continue upward.

Industry representatives gave the legislature finance committee the view from ground level. Take farming.

“None of our competitors have a carbon tax,” Garnet Etsell of the B.C. Agriculture Council told the committee’s Chilliwack hearing. “This has cost us, to date, with the last increase, $45 million a year. With the increase that’s anticipated in 2012, that’ll be $65 million. Keep in mind that the agriculture industry last year had a cumulative net loss of $80 million.”

B.C.’s biggest greenhouse gas emitters are the petroleum and cement manufacturing industries. They only pay the tax on fuel while significant process emissions are tax-exempt. But even that is stimulating demand for cement imported from outside B.C., This not only hurts domestic producers, it adds emissions via trucking or rail shipping.

Then there is B.C.’s “carbon neutral public sector,” where provincial and local governments are forced to buy carbon offsets. The Pacific Carbon Trust then funds emission-reduction projects for big emitters such as gas plants in the northeast.

So five years on, that’s the upshot of Gordon Campbell’s lofty goal to lead the world in climate action. We’re hurting our own agriculture and manufacturing, and transferring scarce funds from hospitals, senior care homes and schools to subsidize profitable energy corporations. And emissions are still rising.

It’s no wonder the finance committee has recommended major changes to Finance Minister Kevin Falcon. He should cap the carbon tax at the 2012 rate. He should “address the inequity for B.C. cement producers,” and also “consider immediate carbon tax exclusions for agriculture, including the greenhouse sector, and public institutions.”

Falcon allowed last week that B.C.’s competitive position must be considered, now that U.S. President Barack Obama has reversed himself on the need for an emission trading system that would have levelled the North American playing field. Look for changes when Falcon tables his first budget in February.

Does this mean B.C.’s climate strategy is dead? No. Delegates from U.S. states and Alberta gathered in front of the legislature to kick the tires on B.C.’s newest weapon, natural gas-powered vehicles. Garbage trucks, school buses and milk truck fleets have switched from diesel to natural gas, and thanks to its abundance and low price, they’re saving 50 per cent on fuel bills.

The trucks and buses eliminate particulate pollution and reduce carbon emissions by 30 per cent compared to gasoline or diesel.

Transportation Minister Blair Lekstrom says natural gas is being considered for BC Ferries, the largest public-sector emissions source of all, which is exempt from the carbon neutrality rule.

Tom Fletcher is legislative reporter and columnist for Black Press and BCLocalnews.com