In 2008, British Columbia rolled out the first large-scale carbon tax in North America. It is a somewhat unique tax because it is “revenue-neutral,” meaning that the government returns the revenue to taxpayers in the form of reductions in personal and corporate income taxes, along with a few other targeted tax reductions. In short, BC aims to reduce emissions by taxing harmful pollution while at the same time boosting economic growth by reducing tax rates.
Sightline has long argued that BC’s carbon tax is a good model, and now two recent independent reports chart the policy’s progress. One, British Columbia’s Carbon Tax Shift: The First Four Years, is by the University of Ottawa’s Sustainable Prosperity research network. The other, Making Progress on B.C.’s Climate Action Plan, is by the BC Ministry of Environment.
Together the reports show that BC’s carbon tax has been accompanied by the strongest GDP growth in Canada as well as modest reductions in greenhouse gas emissions. New data in the reports suggest that BC is decoupling its economic growth from fossil fuel use and carbon emissions—an encouraging sign for sustainable growth.
Decreasing Emissions
The past four years have been a success for emissions reductions in BC. The Sustainable Prosperity report finds that emissions in 2010—the latest year for which data are available—had dropped by 4.5 percent from 2007 levels. And in fact, according to the Ministry of Environment, emissions covered by the carbon tax decreased by 9.9 percent on a per capita basis between 2008 and 2010.


