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BC’s Carbon Tax Shift After Five Years: Analysis of Environmental and Economic Impacts

BC’s Carbon Tax Shift After Five Years: Analysis of Environmental and Economic Impacts. Stephanie Cairns On behalf of Prof. Stewart Elgie and Jessica McClay. Who We Are and What We Do. National environment-economy think tank and research network 100+ profs from Canada and world

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BC’s Carbon Tax Shift After Five Years: Analysis of Environmental and Economic Impacts

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  1. BC’s Carbon Tax Shift After Five Years:Analysis of Environmental and Economic Impacts Stephanie Cairns On behalf of Prof. Stewart Elgie and Jessica McClay

  2. Who We Are and What We Do • National environment-economy think tank and research network • 100+ profs from Canada and world • Leaders from NGO, business, policy • Secretariat at Univ. of Ottawa • Ideas: Produce rigorous research and reports • Connect: High-impact events and dialogues • Results: Outreach aimed at informing policy

  3. BC’s Carbon Tax Shift After 5 Years:Methodology • Focus on environmental effectiveness and economic impact • StatsCan and Environment Canada data • Focus mainly on fossil fuels (vs GHGs) • To help isolate effects of tax • Compared BC with rest of Canada • Examined trends pre- and post tax • Compared with non-taxed fuels • Caution: further economic analysis needed to reach more firm conclusions about these effects and causality

  4. Overall Fuel Use Change:BC vs Canada (2008-12) • BC’s fuel use down 18.8% vs rest of Canada since C tax shift • So economic downturn doesn’t explain it (all provs had that) • Source: Elgie, McClay (2013)

  5. Other Pre-existing Drivers? • BC & Canada tracked consistently pre-2008 on fuel efficiency, but the gap grew rapidly after 2008 when the carbon tax introduced • Source: Elgie, McClay (2013)

  6. Occurring Across All Fuel Types *Aviation fuel is the exception (largely exempt!) • * Excludes little-used fuels (Naptha, Butane) • Source: Elgie, McClay (2013)

  7. GHG changes (2008-11) • Source: Elgie, McClay (2013) • Slightly smaller gap, maybe due to: • Shorter time (no 2012) • GHG data includes first 6 months of 2008 (pre C-tax) • Data differences?

  8. Effects on Economy GDP Change: BC vs Canada 2008-11 • BC’s GDP has stayed similar to rest of Canada’s since 2008 • But carbon tax’s effect is very small part • Similar to EU experience (small positive GDP change) • No doubt winners and losers, e.g: • Clean tech sector has doubled • Very small impacts on agriculture (est. <0.5%, prelim.)

  9. Taxpayer Impacts • The tax shift has resulted in lower overall taxes for BCers (about $500M) • BC now has lowest corp (tied) and personal income tax

  10. Overall • BC now has • Lowest fuel use in Canada • Lowest income tax • Healthy economy (with fast-growing clean tech) Greenery in Canada We have a winner B.C.’s carbon tax woos sceptics Jul 21st 2011 “Best-designed carbon tax in the world” (Prof. Paul Ekins, University College London)

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