25 July 2011 – From The Economist: Carbon tax is working well in British Columbia, Canada since its introduction in 2008.
Despite the levy, its economy is doing well. What is more, the tax is popular: it is backed by 54 per cent according to a survey in the province by Environics, a pollster.
Gordon Campbell, the Liberal premier who introduced the tax, won a provincial election the next year.
When arguing for the carbon tax, Mr Campbell faced the same political obstacles that have stymied such plans elsewhere.
Only environmentalists were enthusiastic. Businesses feared it would add to costs and slow the economy. The leftish New Democratic Party worried it would hurt the poor.
But these fears have proved groundless. “The carbon tax has been good for the environment, good for taxpayers and it hasn’t hurt the economy,” says Stewart Elgie, a professor of law and economics at the University of Ottawa.
It helped that the law introducing the levy required its proceeds to be recycled back to individuals and companies as cuts in income taxes.
Since 2008 fuel consumption per head in the province has dropped by 4.5 per cent more than elsewhere in Canada.
British Columbians use less fuel than any other Canadians. And British Columbians pay lower income taxes too.