Market Based Instruments

Market Based Instruments

National Experiences in Environmental Sustainability

Critical Issues in Environmental Taxation series

Edited by Larry Kreiser, David Duff, Janet E. Milne and Hope Ashiabor

This detailed book explores how market based environmental strategies are used in various countries around the world. It investigates how successful sustainability strategies used by one country can be transferred and used successfully in other countries, with a minimum of new research and experimentation. Leading environmental taxation scholars discuss this question and analyse a set of key case studies.

Chapter 9: Assessing British Columbia’s carbon tax design: public and stakeholder perspectives

Ekaterina Rhodes and Matt Horne

Subjects: economics and finance, environmental economics, public finance, environment, environmental economics, environmental law, law - academic, environmental law, tax law and fiscal policy

Extract

In 2008, British Columbia (BC) implemented the first broadly-based and revenue-neutral carbon tax in North America as part of its efforts to reduce greenhouse gas (GHG) emissions. The carbon tax applies to almost all fossil fuel combustion in the province (75 per cent of emissions), with the rate initially set at CAN$10 per tonne of GHG emissions (expressed in carbon dioxide equivalent), rising annually by CAN$5 per tonne until it reached CAN$30 per tonne on 1 July 2012. The revenue from the carbon tax (projected to be CAN$1.172 billion in 2012–2013) is used for corporate tax cuts (projected to be CAN$829 million in 2012–2013), personal income tax cuts (projected to be CAN$235 million in 2012–2013), low-income tax credits (projected to be CAN$195 million in 2012–2013), the northern and rural homeowner benefit (projected to be CAN$67 million in 2012–2013),and several other personal tax credits (projected to be CAN$49 million in2012–2013) (BC Ministry of Finance 2013). According to the 2013 budget, no further increases or expansions are planned at this time. In the past four years the carbon tax has been subject to its fair share of debate, but the policy has largely followed the initial design laid out in the 2008 provincial budget. In the 2012 budget, the provincial government announced a review of the carbon tax.

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