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The Political Economy of British Columbia's Carbon Tax

Author

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  • Kathryn Harrison

    (University of British Columbia)

Abstract

In July 2008, the Canadian province of British Columbia (BC) launched North America’s first revenue-neutral carbon tax reform. The tax, which applied to all combustion sources of all fossil fuels, was introduced at a rate of CAD 10 per tonne of CO2, with a schedule for annual increases of CAD 5 per tonne of CO2 until the tax reached CAD 30 per tonne of CO2 in 2012. Tax revenues were fully recycled via a combination of corporate and income tax cuts, phased in over time. This paper reviews the political economy of the BC tax in three distinct periods – its origins, its survival in the face of political backlash, and its longer-term prospects... En juillet 2008, la province canadienne de Colombie-Britannique a été la première collectivité d’Amérique du Nord à procéder à une réforme fiscale sans incidence sur les recettes impliquant la mise en place d’une taxe carbone. Le montant de cette taxe frappant l’ensemble des sources de combustion et des énergies fossiles a été fixé dans un premier temps à 10 CAD par tonne de CO2, mais il était prévu dès le départ qu’il augmenterait chaque année de 5 CAD pour atteindre 30 CAD par tonne de CO2 en 2012. Le produit de la taxe carbone a été intégralement recyclé sous forme de baisses progressives de l’impôt sur les sociétés et de l’impôt sur le revenu. Le présent document examine l’économie politique de la taxe instaurée par la Colombie-Britannique en distinguant trois phases : les origines de la taxe, son maintien sur fond de réactions politiques négatives et ses perspectives à plus long terme...

Suggested Citation

  • Kathryn Harrison, 2013. "The Political Economy of British Columbia's Carbon Tax," OECD Environment Working Papers 63, OECD Publishing.
  • Handle: RePEc:oec:envaaa:63-en
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    File URL: http://dx.doi.org/10.1787/5k3z04gkkhkg-en
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    Citations

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    Cited by:

    1. Kathryn Harrison, 2015. "International Carbon Trade and Domestic Climate Politics," Global Environmental Politics, MIT Press, vol. 15(3), pages 27-48, August.
    2. Martin L. Weitzman, 2017. "On a World Climate Assembly and the Social Cost of Carbon," Economica, London School of Economics and Political Science, vol. 84(336), pages 559-586, October.
    3. Carl, Jeremy & Fedor, David, 2016. "Tracking global carbon revenues: A survey of carbon taxes versus cap-and-trade in the real world," Energy Policy, Elsevier, vol. 96(C), pages 50-77.
    4. David Houle & Erick Lachapelle & Mark Purdon, 2015. "Comparative Politics of Sub-Federal Cap-and-Trade: Implementing the Western Climate Initiative," Global Environmental Politics, MIT Press, vol. 15(3), pages 49-73, August.
    5. Beck, Marisa & Rivers, Nicholas & Yonezawa, Hidemichi, 2016. "A rural myth? Sources and implications of the perceived unfairness of carbon taxes in rural communities," Ecological Economics, Elsevier, vol. 124(C), pages 124-134.

    More about this item

    Keywords

    carbon tax; policy lessons; political economy; taxe carbone; économie politique;

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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