British Columbia’s Carbon Tax

Laser Talk

Question: Has any other government imposed a revenue-neutral carbon tax?

Answer:  Yes, the Canadian province of British Columbia. They did this in 2008, and so far it’s worked for both the economy and the environment [1]. By 2014, as the tax went from $10 to $30 per ton, their economy grew about 12 percent — higher than the national average — while carbon emissions per person went down almost 10 percent, twice as fast as the nation as a whole. [2,3]

This carbon tax, which applies to fuels accounting for 77% of the province’s emissions, is designed to be revenue neutral by virtue of cuts to personal and corporate income taxes, low-income tax credits, and a property tax reduction for northern and rural homeowners. [1]

What about the politics? The carbon tax was proposed and championed by the center-right BC Liberal Party [4] as a more market-friendly method of regulating carbon than a cap-and-trade plan supported by the left-leaning BC New Democratic Party. [5] One study on the program’s popularity stated “A clear and growing majority of British Columbians (60 percent) endorse their provincial carbon tax, and a similar proportion elsewhere in the country would support such a tax in their own province to address climate change.”  Support had been below 50 percent before the start of the tax in 2008. [6]

Since it went into effect, the carbon tax has generally had strong public support. The BC government has announced it will start going up an additional $5 per ton of CO2 each year until 2050 emissions targets are met, [7] while the remaining provinces follow in early 2019 under a national Canadian carbon pricing program. [8]

  1. “Carbon Tax Act.” 2008 Legislative Session: 4th Session, 38th Parliament.
  2. “Trends in Greenhouse Gas Emissions in B.C. (1990-2014).” Environmental Reporting BC (updated Aug 2016).
  3. “B.C. to lead Canada in economic growth in 2015: BMO.” Business Vancouver (May 2015).
  4. “British Columbia Liberal Party.” Wikipedia (16 Jan 2018).
  5. “British Columbia New Democratic Party.” Wikipedia (9 Jan 2018).
  6. Environics Institute “Canadian Public Opinion About Climate Change”, 2015 p. 6-7
  7. “British Columbia government raises carbon tax, corporate tax rate.” Reuters Market News (Sep 2017).
  8. “Provinces have until the end of 2018 to submit carbon price plans: McKenna.” CBC News: Politics (Dec 2017).

This page was updated on 05/11/18 22:41 CDT.

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