British Columbia

The British Columbia revenue-neutral carbon tax is a key component of their Climate Action Plan to reduce GHG emissions by 33% below 2007 levels by 2020.

Thus far, the tax looks successful; emissions were reduced without hurting the economy.  From 2008 to 2011, BC had reduced those Greenhouse Gases (GHG) subject to the tax by 10%. From 2009 to 2013, BC’s real GDP growth was on a par with Canada.  According to the World Bank report, the BC budget has become increasingly reliant on the carbon tax revenues.  As expected, the tax has been debated and tested in elections, but has thus far survived scrutiny.

The BC carbon tax has the following key elements:

  • All carbon tax revenue is recycled through tax reductions
  • The tax rate started low and increased gradually – The initial carbon tax rate was CAN$10/tCO2e, gradually
    increasing by an annual rate of CAN$5/tCO2e to CAN$30/tCO2e (US$28) in 2012 where it is frozen.
  • Low-income individuals and families are protected
  • The tax has the broadest possible base
  • The tax will be integrated with other measures – The plan is to integrate carbon tax with complementary measures such as a cap and trade as the system is developed.