BC Carbon Tax: A Big Winner for People, Climate and the Economy Study Shows

bc carbon tax

British Columbia's five-year old carbon tax has managed to cut personal and corporate taxes, slash climate-wrecking carbon emissions and be an economic success story according a study published this week. Plus it's popular with the public. That's a stunning win-win-win-win.

And yet for nearly a year Conservative MPs have launched relentless attacks on the very idea of carbon tax in the House of Commons. In 41 days the House of Commons was in session this year, Conservative MP after Conservative MP rose in the House to issue dire warnings about a carbon tax more than 250 times. And the issue was not even on the table.

Who are these Conservative MPs working for?

Thanks to the carbon tax BC residents enjoy the lowest income tax in the country (not Albertans), use the least amount of fuel per person and have arguably the healthiest economy the study found. So much for the Tories baseless claims of doom and gloom.

“If you look at the real evidence the BC carbon tax is a remarkable success,” said Stewart Elgie, lead author of the “BC’s Carbon Tax Shift After Five Years: Results” study and professor of law and economics at University of Ottawa.

The innovative BC policy increases taxes on things people don't want: carbon pollution, and reduces taxes on things people do want: incomes and earnings. It's more accurate to call it a carbon tax shift. Here's how it works: a carbon levy was gradually added to the costs of fossil fuels while income (personal and corporate) taxes were cut. It is revenue neutral so the BC government collected the same amount of overall taxes.

After five years the carbon tax on gasoline is now 7 cents a litre. BC's per person fuel consumption dropped an astonishing 17.4% after four years. (data for the fifth year is not yet compiled) In the rest of Canada fuel consumption went up 1.5%. While gas might be a bit more expensive, BC residents are actually saving money by using far less. And as a bonus their taxes have gone down. Win-Win.

Emission Cut Score: BC 10, Canada 1

Total carbon (greenhouse gas) emissions in BC declined 10% over the first four years of the carbon tax much better than the 1.1% decline across Canada according to data from Environment Canada.

Canada had 20 years to meet its Kyoto Protocol target of a 6% emission reduction and failed. The Harper government claimed the target was impossible and turned Canada into the first nation to pull out of the international agreement. Amazingly BC's smart government policy achieved 10% reduction in only 4 years and its economy is doing slightly better than the rest of Canada. Win-Win.

“It's not a trade off between the economy or the environment. Nor between jobs and the environment. Those are false choices,” Elgie told DeSmog.

“Many business leaders know that industries and regions that have high levels of energy efficiency and low levels of pollution will be the winners.” 

There is widespread support for putting a price on carbon across Canada. The Council of Canadian Chief Executives have endorsed a national carbon tax. Most oil companies support this as well said Elgie.

Canadians get it as well. A recent poll conducted by Harris-Decima found that 62% of Canadians agree that “a Canadian energy strategy will only be successful if it transitions Canada to a low-carbon economy”

The Carbon Tax, BC's most popular tax

BC's Gordon Campbell-led Liberals deserve credit for having the courage to be leaders said Elgie. An important lesson for policy makers is that the Campbell government did not pay a political price for being ahead of the curve. In fact in an election soon after the carbon tax shift went into effect they gained more support. “It may have helped them a bit.”

Today polls show that nearly 65% of all BC residents support the carbon tax. It's hard to imagine any other tax with that level of support.

While this is one of the best designed carbon taxes in the world it could use some improvement said Elgie. It currently exempts venting and fugitive emissions from the oil and gas sector. As previously documented by DeSmog those emissions are huge and drastically underreported. Moreover BC's Christy Clark government's proposed strategy for liquefied natural gas (LNG) exports will make it impossible to achieve the legislated goal of a 33% reduction in emissions by 2020 without properly taxing all emissions from gas production.

“Taxing pollution and lowering income taxes is the best way to build a greener and stronger economy. The world is moving in that direction and Canada risks being left behind,” said Elgie.

BC brings made-in-Canada proof that a carbon tax shift is the most cost-effective way to build the clean and green economy Canadians want. “Our future prosperity is too important to be trapped in senseless partisan politics. Canada desperately needs statesmen to fight for our long term interests.”

So who are Conservative MPs working for when they make unsubstantiated attacks on carbon taxes?