“A steadily escalating B.C. carbon tax, together with other government-determined cost pressures such as higher corporate tax rates and the new employer health tax as well as rising fees and regulatory costs, may lead to slightly lower greenhouse gas [GHG] emissions – not because of reductions in GHG intensity or stepped-up innovation by B.C. industries, but rather because of shut-in or avoided investment in industrial activities and a shift of investment dollars elsewhere,” writes Denise Mullen, BCBC’s director of environment and sustainability.
Mullen compared B.C.’s carbon tax with all other jurisdictions in the world that have either carbon taxes or cap and trade, and concluded it is among the highest in the world.
There are 50 carbon-pricing schemes in place around the world, about half of which are carbon taxes, with the others being emissions-trading schemes (cap and trade). The highest carbon tax in the world is in Sweden – US$126 per tonne.
But, as Mullen points out, Sweden’s carbon tax applies to only 40% of the economy. Industries in Sweden don’t pay the Swedish carbon tax but participate in the European Union Emissions Trading System. B.C.’s carbon tax covers 70% of the economy.
“On a coverage basis, we top the list globally since all cap and trade systems usually apply only to industry rather than household and commercial operators,” Mullen writes in her analysis.
Mullen said B.C.’s carbon price is 50% higher than what competing industries pay in the European Union, including Sweden and other Nordic countries. Mullen said B.C. doesn’t have an effective policy for addressing leakage.