The idea of putting a price on carbon dioxide emissions to help tackle climate change has been slowly spreading around the globe over the past two decades.
This week, Canada’s federal government took the latest step when it extended its carbon-pricing program nationwide by imposing a tax on fossil fuels in four provinces that had declined to write their own climate plans.
More than 40 governments worldwide have now adopted some sort of price on carbon, either through direct taxes on fossil fuels or through cap-and-trade programs. In Britain, coal use plummeted after the introduction of a carbon tax in 2013. In the Northeastern United States, nine states have set a cap on emissions from the power sector and require companies to buy tradable pollution permits.
With the federal government’s backstop price on carbon pollution taking effect this week in Ontario, Saskatchewan, Manitoba, and New Brunswick, opponents of this vital climate solution have ratcheted up the bombast. However, British Columbia’s experience with its carbon tax provides an effective counterpoint to many of the myths and misconceptions in circulation.
B.C. strengthened its carbon tax on April 1, raising the rate by $5 per tonne to $40 per tonne. When B.C. first introduced its carbon tax 11 years ago, it was the first economy-wide price on carbon pollution in North America. Among explicit carbon prices, B.C.’s is still tops on the continent.
While some would have us believe that putting a price on pollution hurts the economy and doesn’t reduce climate-destabilizing carbon emissions, B.C.’s record clearly shows this rhetoric doesn’t stand up to the facts. We now have more than a decade of data available. Since introducing pollution pricing in 2008, per capita emissions in B.C. are down by 14 per cent, while the economy has grown by 26 per cent.
Let’s take a closer look at B.C.’s economic performance in the carbon tax era. How has B.C.’s economy fared during the past decade? In short, excellent.