This document summarizes British Columbia's carbon tax, which was implemented in 2008 at $10 per tonne of CO2 emissions and increased steadily to $30 per tonne by 2012. The tax applies broadly and has raised billions in revenue, which has been returned to citizens. Analysis shows the tax has reduced emissions without harming the economy. While political and public support for the tax has grown, the next steps beyond maintaining the $30 per tonne rate are still under discussion, including potential increases and expansions recommended by an advisory panel. Key considerations for the future include affordability, competitiveness of industries, and lessons learned from the success so far.

1. Matt Horne
Pembina Institute
April 26, 2016
British Columbia’s
Carbon Tax
A brief history

2. Eight years and counting
2

3. Tax rate and coverage
3
 Implemented in 2008 at $10 per tonne of CO2e with a
schedule to reach $30 per tonne in 2012 (equivalent to ~7
cents per litre of gasoline).
 Frozen at $30 per tonne from 2013 until 2018.
 Applies to almost all fossil fuel combustion in B.C. (~70%
of B.C.’s carbon pollution).
$0
$5
$10
$15
$20
$25
$30
$35
2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16
B.C. Carbon tax rate schedule

4. Revenue recycling
4

5. Environmental results
5

6. Economic results
6 (Source: Statistics Canada, 2000-2014)
0.00
0.25
0.50
0.75
1.00
1.25
1.50
1.75
2.00
2000 2002 2004 2006 2008 2010 2012 2014
Change in GDP
BC
Rest of Canada

7. Political perspectives
7
0
20
40
60
80
2009 election 2013 election
MLAs supporting the carbon tax
MLAs opposed to the carbon tax
(MLA – Member of the Legislative Assembly)

8. Public perspectives
8 (Source: Environics Institute, 2008-2015)
0%
10%
20%
30%
40%
50%
60%
70%
Feb
2008
July
2008
May
2009
June
2010
Nov
2011
Nov
2012
Oct
2013
Oct
2014
Oct
2015
Support forB.C.'s carbon tax

9. Next steps?
 In 2015, B.C. started a process to determine
the next steps in its climate plan.
 A multi-sector advisory panel recommended
increasing and expanding the carbon tax.
 B.C. is planning to release its new climate
plan this spring.
9

10.  Affordability
o Reduce sales tax,
increase low-income tax
credit, and increase
northern/rural tax credit
 Competitiveness
o Implement measures to
protect competitiveness of
emissions-intensive, trade-
exposed sectors
Affordability and competitiveness
10

11. Support for next steps
11

12. Lessons learned
 The carbon tax has been an economic and
environmental success.
 That success also depends on the other policies in
B.C.’s climate plan.
 The success has led to broad support for carbon
tax’s first phase.
 Everyone has an opinion on how to best use
carbon tax revenue.
 Next steps are still uncertain.
12

13. Thank you
Matt Horne
phone: 778.235.1476 email: matth@pembina.org twitter: @HorneMatt