[Vision2020] British Columbia Carbon Tax/Tax Shifting a Success: Stewart Elgie, University of Ottawa Professor of Law and Economics

[Ted Moffett]

A major blow to critics of pricing carbon who insist it will seriously
damage the economy.

Part of the reason for the success of the plan, is tax shifting, which has
lowered income taxes in B.C. while taxing carbon.  Many of those who lower
their carbon impact are thus economically coming out ahead under the plan.

Tax shifting might appeal to some conservatives in the U.S. who would love
to see income taxes reduced.  From what I know, tax shifting to lower
income taxes was not a part of the cap and trade legislation that was under
consideration in the U.S. Congress, ultimately killed:
"Kamarck: Gore’s Carbon ‘Tax Shift’ Beats Cap-and-Trade"
http://www.rollcall.com/features/Mission-Ahead_Climate-Change/ma_energy/-37400-1.html

I find it very odd that other carbon pricing plans, such as the fee and
dividend plan promoted by former NASA climate scientist James Hansen,
"Cap and Fade:"
http://www.nytimes.com/2009/12/07/opinion/07hansen.html?_r=0
which returns all of the fees on carbon to the public, not increasing
government coffers, receive so little attention.  Many middle or lower
income U.S. citizens could economically come out ahead under such a plan;
and that this is not a "tax" on carbon that increases government coffers,
might appeal to more conservatives, who often oppose any pricing on carbon,
being ideologically against "liberal big government tax and regulation."

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The report on B.C. carbon tax/tax shifting success can be read here:

BC’S CARBON TAX SHIFT AFTER FIVE
YEARS: RESULTS
An Environmental (and Economic) Success Story

http://www.sustainableprosperity.ca/dl1026&display

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A news article on this subject is pasted in below:

http://www.cbc.ca/news/canada/story/2013/07/23/bc-carbon-sustainable-prosperity-premiers.html
B.C. carbon tax cut fuel use, didn't hurt economy
Research report asks premiers to discuss carbon tax at summit CBC
News<http://www.cbc.ca/news/credit.html> Posted:
Jul 23, 2013 10:12 PM ET Last Updated: Jul 24, 2013 10:58 AM ET

When B.C. Premier Christy Clark sits down with her fellow provincial and
territorial leaders Wednesday, she might trumpet her government's carbon
tax success at what many critics said was impossible: reducing fossil fuel
consumption without damaging the economy, the author of a new study
suggests.

"You often hear people say you can't have an healthy environment and a
strong economy," said Stewart Elgie, a University of Ottawa professor of
law and economics. "B.C.'s experience shows that's not true."

Elgie is chair of Sustainable Prosperity, a national network of economics
and environment professors funded by the Social Sciences and Humanities
Research Council.

Sustainable Prosperity has released a report that shows since the carbon
tax shift was introduced in 2008, B.C.'s consumption of fossil fuels has
been reduced nearly 19 per cent per capita compared to the rest of Canada,
while the province's gross domestic product has kept pace with the
country's.

The report is the basis of an article to be published in the next edition
of the journal Canadian Public Policy. Elgie said the group wanted to get
the results out now so it can inform the environmental strategy discussions
at the premiers' summit starting Wednesday in Niagara-on-the-Lake, Ont.

The key to the B.C. carbon tax shift's success, Elgie said, is that it
while taxes went up on fossil fuel use, income taxes were reduced, so it
discourages pollution while encouraging employment and investment.

Elgie said economists would predict the policy to work as it has.

"B.C. just had the guts to try it. And it's working."

Elgie admits that with only four years of data, he can't say for certain
the changes in fossil fuel use in B.C. are entirely attributable to the
carbon tax, but he's confident most of them are.

The rest of Canada's premiers should consider following B.C.'s lead, Elgie
argues. Alberta and Quebec also have carbon taxes.

Even provinces where the impact of taxing carbon would be felt more keenly
— such as Ontario, which still relies in part on coal for electricity
generation — the benefits of offsetting that with income tax reductions
would be a greater relief.

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Vision2020 Post: Ted Moffett
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