Think About the Future With the BC Carbon Tax


As California’s ‘cap-and-trade’ law shifts into gear, policy advocates and pundits everywhere are looking at other possible policy moves and weighing on the relative merits of various policy approaches to regulating greenhouse gas emissions. In BC, we have been living with our carbon tax regime for several years now, with occasional furious debates about its popularity and impacts. As policy, it remains effective but far from perfect. A central feature of the debate is ‘where does the money go?’, and while that is important, we wonder if there’s a way to improve the debate by making that question more fully formed. The carbon tax here in BC was promoted as ‘revenue neutral’, and initially those revenues were distributed to individuals to mitigate the modest price increases they saw.

Today, however, BC would do well to have a hard conversation about the best step forward. Getting rid of it, which is what Australia is moving to do, would be the worst possible choice. Shifting back to revenue neutrality by distributing cash to individuals has political appeal, but serious questions have to be raised about whether such a distribution scheme would offer any meaningful progress toward the aggressive (and very needed) emissions reductions we all know need to happen.

A better option may lie in distributing the revenues outside of the BC Government, but in a way that catalyzes serious action.What if each city were allocated its per capita share, but also given some policy direction to invest in grid improvements, deployment of distributed renewable energy technologies, and take stronger steps to improve the efficiency of existing buildings? Research has been done to estimate the billions of dollars of investments needed to do this work, and it would really be useful to more fully present the value of such actions, as each of these actions literally are investments that produce positive economic returns.

If each person is allocated their share, we have no ability to harness this money to make the systemic changes necessary. We agree with the City of Vancouver’s call for some of the carbon tax revenue being directed to regional transit improvements, but imagine how different the conversation would be if the cities each had resources to bring to the challenge, and using established bond finance markets to provide a return on those investment. In 2007, the Board of Change started to crunch the numbers on this work while advocating for a different version of the action taken by the Campbell Government, and the time is ripe to pick up that work again and focus on the value creation of this work as a sharp contrast to the horrible idea (and economically short-sighted) of increasing infrastructure for continued fossil fuel extraction and export.


– Tom Osdoba

Photo Credits: Paul Krueger  

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