British Columbia’s Revenue-Neutral Carbon Tax Laser Talk

In 2008, British Columbia implemented a carbon tax shift, and so far so good both for the economy and environment [1].

Benefits of BC’s Revenue-Neutral Carbon Tax

  1. For the environment, BC sales of fuels subject to the tax has dropped by 15.1% since 2008, while the rest of Canada’s per capita sales have increased by 1.3% [2]. Per capita, British Columbians emitted 9.9% fewer greenhouse gases in 2010 than when the tax started, compared with 5% fewer emissions for the rest of Canada.
  2. For the economy, BC’s GDP growth actually outpaced (by a little bit) the rest of Canada’s after the tax was imposed, which is in line with evidence from seven other countries with similar policies that have had neutral or slightly positive effects on GDP [2].

How BC’s Tax Shift Works

The tax applies to almost all fossil combustion in the province, or 77% of emissions, with the rate initially set at $10 per carbon ton. It rose by $5 per ton per year until it reached $30 as of July 1st in 2012. This tax is completely revenue neutral with income applied to personal income tax cuts, corporate tax cuts, low-income tax credits and the Northern and Rural Homeowner Benefit [1].

Acceptance of BC’s Revenue-Neutral Carbon Tax

In terms of political will, public support for the carbon tax is on the rise.

A recent poll shows that 64% of British Columbians are in support of the policy.  The same poll found the percentage of British Columbians strongly opposing the taxes at an all time low of 17% [3].

BC and countries in Europe have demonstrated that there is no boogey men when it comes to revenue-neutral carbon taxing. A credible mechanism to reduce emissions can help stimulate and diversify the economy.

Skeptic Claims and One-Liners

Carbon Fee Skeptic Claim: There are no examples of a carbon tax working.
One-Liner: British Columbia, Canada has done it while reducing their fossil fuel emissions more and growing more than the rest of Canada.

  1. Carbon Tax Act.” 2008 Legislative Session: 4th Session, 38th Parliament.
  2. Where Carbon is Taxed”. The Carbon Tax Center. Last updated: Jan 15, 2013.
  3. Lake, Terry. “Comment: Support for B.C.’s carbon tax continues to grow”. Dec 20, 2012. Times Colonist.

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