IISD Submission to the British Columbia Carbon Tax Review

This briefing by the International Institute for Sustainable Development (IISD) evaluates the impact of British Columbia's carbon tax and provides recommendations for its future. The document argues that the tax has successfully reduced emissions without hindering economic growth and suggests maintaining the current policy structure while addressing emerging challenges such as natural gas expansion and price misalignment with the United States.

• The British Columbia carbon tax is an effective policy that has contributed to emissions reductions while the province experienced economic growth. Between 2007 and 2010, emissions fell by approximately 4.5%, while provincial GDP rose by 4.4% and population growth increased by 5%.
• IISD estimates that at a holding rate of $30 per tonne, the carbon tax could deliver roughly 3 megatonnes of annual emissions reductions by 2020. This would represent approximately 14% of British Columbia's provincial target to reduce emissions by 33% below 2007 levels by 2020.
• The carbon tax is designed for revenue neutrality, providing financial benefits to residents and businesses through tax reductions. For the 2011–2012 period, forecasted revenue of $960 million was paired with $1.152 billion in tax reduction measures, including cuts to personal and business income taxes and property taxes.
• While British Columbia's carbon tax was once a policy outlier, other Canadian provinces have since implemented various mitigation regimes. These include Quebec's carbon tax and its 2013 cap-and-trade system, Manitoba's emissions tax on coal, Alberta's system of intensity targets and offsets, and regulatory approaches in Ontario and Nova Scotia.
• The expansion of the natural gas sector in British Columbia presents a dual challenge: while it offers economic benefits and serves as a 'bridging' fuel, it will likely cause a domestic increase in emissions due to extraction, processing, and transport.
• A significant policy gap exists between British Columbia and the United States, as the Western U.S. (excluding California) lacks a carbon price. This misalignment creates a disadvantage for British Columbian industry, particularly in the expanding natural gas sector.
• IISD recommends that the carbon tax be retained at its current rate to provide policy certainty. It also suggests that the province consider rethinking quantity targets in favor of carbon pricing or intensity targets, especially in the face of natural gas expansion.

APA

Gass, P., & Sawyer, D. (2012). IISD Submission to the British Columbia Carbon Tax Review. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/bc_carbon_tax.pdf

Chicago

Gass, Philip, and Dave Sawyer. IISD Submission to the British Columbia Carbon Tax Review. International Institute for Sustainable Development, 2012. https://www.iisd.org/system/files/publications/bc_carbon_tax.pdf.

Wikipedia

{{cite report |last1=Gass |first1=Philip |last2=Sawyer |first2=Dave |title=IISD Submission to the British Columbia Carbon Tax Review |publisher=International Institute for Sustainable Development |date=August 2012 |url=https://www.iisd.org/system/files/publications/bc_carbon_tax.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{gass2012iisd, author = {Gass, Philip and Sawyer, Dave}, title = {{IISD Submission to the British Columbia Carbon Tax Review}}, institution = {International Institute for Sustainable Development}, year = {2012}, month = aug, url = {https://www.iisd.org/system/files/publications/bc_carbon_tax.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }