The western Canadian province of British Columbia (BC) has been reducing fuel use without adverse impact on the economy since charging carbon tax in 2008, according to a study released on Wednesday.
Conducted by national green economy think-tank, the Sustainable Prosperity, the study found that since BC became the first jurisdiction in North America charging carbon tax, its fuel consumption per capita has fallen by 17.4 percent, compared with a 1.5-percent increase in the rest of Canada.
From 2008 to 2011, BC’s green house gas emissions per capita associated with carbon taxed fuels declined by 10 percent, while the figure in other Canadian provinces only dropped by 1.1 percent.
The findings will be published on the upcoming issue of Canadian Public Policy.
The study also found that over the same period, BC’s economy has even slightly outperformed other provinces. Its GDP per capita dropped by 0.15 percent from 2008 to 2011, while the rest of the country dropped 0.23 percent.
Stewart Elgie, lead author of the study and a professor of law and economics at University of Ottawa, said the key to the success is that BC’s carbon tax shift was designed to be “revenue neutral,” which means all revenues are used to reduce other taxes such as income taxes.
Elgie said the province’s experience shows that it is possible to have both a healthier environment and a strong economy “by taxing pollution and lowering income taxes.”
Premiers of Canadian provinces meet from July 24 to 26 to discuss a proposed Canadian Energy Strategy which includes “a more integrated approach to climate change.”
Elgie hoped that BC’s success will inspire premiers to show leadership on a national mechanism of pricing carbon pollution.
