British Columbia's revenue-neutral carbon tax: A review of the latest "grand experiment" in environmental policy

Journal Article (Journal Article)

In 2008, British Columbia implemented the first comprehensive and substantial carbon tax in North America. By 2012, the tax had reached a level of C$30/t CO2, and it covers about three-quarters of all greenhouse gas emissions in the province. This paper reviews existing evidence on the effect of the tax on greenhouse emissions, the economy, and the distribution of income, and provides new evidence on public perceptions of the tax. Empirical and simulation models suggest that the tax has reduced emissions in the province by between 5% and 15% since being implemented. At the same time, models show that the tax has had negligible effects on the aggregate economy, despite some evidence that certain emissions-intensive sectors face challenges. Studies differ on the effects of the policy on the distribution of income, however all studies agree that the effects are relatively small in this dimension. Finally, polling data shows that the tax was initially opposed by the majority of the public, but that three years post-implementation, the public generally supported the carbon tax.

Full Text

Duke Authors

Cited Authors

  • Murray, B; Rivers, N

Published Date

  • November 1, 2015

Published In

Volume / Issue

  • 86 /

Start / End Page

  • 674 - 683

International Standard Serial Number (ISSN)

  • 0301-4215

Digital Object Identifier (DOI)

  • 10.1016/j.enpol.2015.08.011

Citation Source

  • Scopus