Lessons from B.C.’s carbon taxA backgrounder

Blog - Nov. 5, 2014 - By Ed Whittingham

It’s been hailed as an environmental and economic “success,” a “textbook case” in carbon pricing and “on the right track” toward good economic policy. British Columbia’s carbon tax has been in place for six years, and all available evidence shows it’s working. 

Here’s the big news: per capita fuel use covered by the tax has dropped by 16 per cent in the province relative to 2008 (the year the carbon tax came into effect), and so too has carbon pollution. That’s good for the environment. Meantime, B.C.’s economy has outpaced the rest of Canada’s over the same period. That’s great for jobs and the economy.

cover of The B.C. Carbon Tax: Backgrounder

Our new backgrounder summarizes B.C.’s terrific success with its carbon tax. The economic, environmental and social lessons are worth reflecting upon — both in B.C. and in jurisdictions considering similar carbon pricing approaches, as what we see in B.C. is a leading example of how to price carbon effectively. 

We touch on the design of the tax, including important features such as a schedule of rate increases over the first five years and a requirement known as “revenue neutrality” that mandates all carbon tax dollars be recycled back to British Columbians and B.C. businesses through tax cuts and credits. We also discuss the impact it’s had on B.C.’s environment and economy, summarizing its influence province-wide and on specific economic sectors. 

Of course, North America’s most significant carbon pricing policy hasn’t gone without challenges. We share key points of debate that have unfolded and look at how public opinion has evolved over the past six years. But one thing is for sure, having survived two elections and a change in premier, B.C.’s carbon tax is here for the foreseeable future.

When it comes to the carbon tax, the message from B.C. is hopeful: acting on climate change can be economically, environmentally and politically successful.


Ed Whittingham

Ed is the Executive Director of the Pembina Institute. He has served in an advisory capacity to companies, industry associations, government bodies and research networks on sustainable energy solutions.


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