Report: British Columbia Carbon Tax, a Bad Fit for the U.S.


WASHINGTON – Rebutting claims that the United States should adopt a carbon tax, the Competitive Enterprise Institute (CEI) released a new report on Tuesday explaining how the go-to example of carbon tax success – British Columbia – falls short of its hype.

“British Columbia has implemented something very close to a textbook carbon tax, but it’s not a model for the United States because real-world experience offers no reasonable grounds for believing a U.S. carbon tax would be revenue-neutral, economically-benign, or a cure for regulatory excess,” said Marlo Lewis, CEI senior fellow and author of Why British Columbia’s Carbon Tax Is not Applicable to America.

In the report, Lewis rebuts proponents’ claims that British Columbia’s carbon tax is a pro-growth policy and makes BC’s income tax rates the lowest in Canada, pointing out that BC already had the lowest income tax among Canadian provinces before the carbon tax was implemented in 2008.

“But the chief reason British Columbia is not an appropriate model for the United States is that the province’s geology, climate, and electric supply system are extremely different from the vast majority of U.S. states,” said Lewis. “Hydro-powered British Columbia gets less than 6 percent of its electricity from carbon sources, and that limits the damage that a modest carbon tax can do to the province’s economy.”

CEI’s report comes a week before the United Nations' Climate Summit in New York City, where major carbon tax and emission reduction plans are set to be unveiled.