March 2, 2016

TAX WHAT YOU DON'T WANT, NOT WHAT YOU DO:

Does a Carbon Tax Work? Ask British Columbia (Eduardo Porter, 3/01/16, NY Times)

In 2008, the British Columbia Liberal Party, which confoundingly leans right, introduced a tax on the carbon emissions of businesses and families, cars and trucks, factories and homes across the province. The party stuck to the tax even as the left-leaning New Democratic Party challenged it in provincial elections the next year under the slogan Axe the Tax. The conservatives won soundly at the polls.

Their experience shows that cutting carbon emissions enough to make a difference in preventing global warming remains a difficult challenge. But the most important takeaway for American skeptics is that the policy basically worked as advertised.

British Columbia's economy did not collapse. In fact, the provincial economy grew faster than its neighbors' even as its greenhouse gas emissions declined.

"It performed better on all fronts than I think any of us expected," said Mary Polak, the province's environment minister. "To the extent that the people who modeled it predicted this, I'm not sure that those of us on the policy end of it really believed it."

The tax, which rose from 10 Canadian dollars per ton of carbon dioxide in 2008 to 30 dollars by 2012, the equivalent of about $22.20 in current United States dollars, reduced emissions by 5 to 15 percent with "negligible effects on aggregate economic performance," according to a study last year by economists at Duke University and the University of Ottawa.

The tax made fuel more expensive: A gallon of gas, for example, costs 19 United States cents more. It encouraged people to drive somewhat less and be more careful about heating and cooling their homes. Businesses invested in energy efficiency measures and switched to less polluting fuels.

Despite the price increases, voters warmed to the tax. Last year only 32 percent of British Columbians opposed the tax, down from 47 percent in 2009.

Posted by at March 2, 2016 1:00 PM

  

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