The effect of carbon taxation in British Columbia

[watervole]

 I forget how I came across this report, but it's an interesting read and not too lengthy.  I always thought carbon taxes made sense as the best way to tackle climate change, but the really interesting thing is that British Columbia have done it without damaging their economy.

Here's the summary

Almost all economists, and most Canadian business and environmental leaders, believe 

that a carbon price is the most cost-effective tool for reducing GHG emissions. BC’s 

carbon tax shift, though just four years old, is providing increasing evidence that they 

are right. 

Since 2008, when the tax came in, fuel use and GHG emissions in BC have dropped 

substantially – much more than in the rest of Canada. At the same time, BC’s GDP 

growth has outpaced the rest of Canada’s by a small amount, suggesting that the tax 

shift has not harmed the province’s economy. The BC government has also kept its 

promise to make the tax revenue neutral; in fact it has returned more in tax cuts (by 

over $300 million) than it has received in carbon tax revenue. 

BC took a risk in introducing the carbon tax, which was initially quite controversial. BC 

is one of the few North America states or provinces with a price on carbon – a price that 

is among the highest in the world. That risk seems to have been rewarded. BC 

households and businesses now pay the lowest income taxes in Canada, due to the tax 

shift, and use the least amount of petroleum fuels per capita of any province. BC is also 

decoupling its economic growth from fuel consumption (and GHG emissions) faster than 

the rest of Canada. In other words, it is building a greener economy – which should 

position it well for future success in global markets. It will also help to shelter the BC 

economy from future petroleum price increases and volatility. 

Comments

[damerell]

Of course, BC does have the advantage of a highly profitable cash crop, much more so than most agriculture. :-)