Does British Columbia Have Proof That A Carbon Tax Can Work?

What’s the Latest Development?

Five years after British Columbia first introduced a “carbon tax” on most of the fossil fuels used within its borders, a new study suggests that it has contributed to lowering both fuel consumption per person (by 17 percent) and the rate of greenhouse gas emissions (by 10 percent). Even better, according to study author and University of Ottawa professor Stewart Elgie, the economy experienced little to no negative impact as a result. Also, the income provided by the carbon tax was used to reduce corporate and personal tax rates; the province’s citizens now pay the lowest income taxes in all of Canada.

What’s the Big Idea?

While some US states include a carbon tax, attempts to create a federal policy have been stymied by those who resist any raise in taxes. Indeed, the British Columbia carbon tax has gone up each year since 2008, and today drivers pay about seven cents more per liter of gas. However, the drop in emissions helped put the province on course towards a stated reduction goal of 33 percent by 2020. While Elgie notes that more research is needed to further define the link between the tax and the outcome, “B.C.’s experience shows that it is possible to have both a healthier environment and a strong economy.”

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