Placing a price on carbon and then taxing it is probably the best and most effective way to incentivize individuals and businesses to move away from fossil fuels and to adopt renewable energy technologies. Any time there is any mention of new taxes or raising taxes our natural free market defense mechanisms kick in and we collectively say No New Taxes. Taxes are bad. Setting aside our natural aversion to taxes, regardless, we’re going to need to tax carbon, so the question becomes can a carbon tax work without hurting the economy. Canada’s British Columbia instituted a revenue neutral carbon tax back in 2008 and there has been ample follow up by the more enlightened media outlets who have reported on its effects so far. Without getting going too far in to detail the general effect on the BC economy has been exactly what was expected and hoped for – BC has the lowest personal taxes in Canada and lowest corporate taxes in North America, fuel consumption is down (almost 16%) and overall the BC economy has kept pace head to head with the rest of Canada. If you want to read more on the topic and the findings then below I’ve provided links to a host of articles and commentary that are excellent.
The Economist: British Columbia’s Carbon Tax: The Evidence Mounts
Sightline: All You Need To Know About BC’s Carbon Tax Shift
The World Bank: British Columbia’s Carbon Tax Shift: An Environmental And Economic Success