Despite carbon tax, sky isn’t falling in B.C.

Blog - July 26, 2013 - By Josha MacNab

Research suggests B.C.'s carbon tax is reducing fossil fuel use while the economy grows. Photo: Kevin Sauvé, Pembina Institute

An article by the Brookings Institution earlier this year said it best: “Want a pro-growth pro-environment plan? Economists agree: tax carbon.” Now a new study of B.C.’s carbon tax is adding further valuable evidence in support of the carbon tax as a smart and effective policy for curbing emissions and driving innovation.

The report, published by Stewart Elgie and Jessica McClay of the University of Ottawa think-tank Sustainable Prosperity, suggests that B.C.’s carbon tax has been very effective at lowering fossil fuel use without having a negative impact on B.C.’s economy.

The study finds that, since the carbon tax was introduced in 2008, B.C.’s use of fossil fuels covered by the tax has declined by more than 17 per cent. The rest of Canada, on the other hand, showed a 1.5 per cent increase in fossil fuel use.

Meanwhile, B.C.’s economy fared just as well as the rest of Canada.

Now, the authors are careful to point out that after five years, it’s too early to draw firm conclusions about how much the carbon tax may have contributed to the decline in fossil fuel use.

But the study’s results are compelling. They indicate a huge success for B.C.’s carbon tax as a policy for cutting down on the burning of fossil fuels, and thus reducing the emissions that drive climate change. And they provide further evidence that we can make progress on climate change without hurting the economy.

Research done here at the Pembina Institute has anecdotally indicated that the carbon tax is encouraging investments in cleaner energy and more energy efficient options. It’s great to see that these kinds of investment decisions are making a difference across the economy.


Josha MacNab

Josha MacNab is the national director of policy and strategy for the Pembina Institute. She is based in Vancouver.


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