The evidence for effectiveness of carbon pricing

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Effect of carbon tax in reducing GHG emissions:

• Study comparing five European countries that had implemented a carbon tax to 13 which hadn’t1

  • Study controlled for GDP per capita, industry structure, and energy price

    • Emission reductions seen in all countries with a carbon tax except Norway

    • Emission reduction directly linked to the carbon tax only in Finland

      • Assumed to be related to limited/few exemptions to carbon tax in Finland

    • 7% more reduction in emission in Finland than would have been without carbon tax2

• Reductions seen in other countries, but not directly linked to carbon tax

  • Denmark: 15% reduction in per capita emission (1990-2005)

  • UK: 58 million metrics of emissions reduction (2001-05)

  • British Columbia: 10% reduction vs. 1% (rest of Canada) (2008-11) (Emissions change of -1.5%, -6.7%, -1.1% and -2.4% for BC, and -3.6%, -3.9%, -0.9% and +3.9% for rest of Canada for 2008, 2009, 2010, and 2011, respectively, as shown in figure below).

bc - ghg emissons carbon tax_0.png

1.    Lin, B. & Li, X. The effect of carbon tax on per capita CO2 emissions. Energy Policy 39, 5137–5146 (2011).

2. Sumner, J., Bird, L. & Dobos, H. Carbon taxes: a review of experience and policy design considerations. 922–943 (National Renewable Energy Laboratory, 2009). at <http://www.tandfonline.com/doi/abs/10.3763/cpol.2010.0093>

3. Elgie, S. & McClay, J. BC’s carbon tax shift after five years: Results. An environmental (and economic) success story. (Sustainable Prosperity, 2013). at <http://www.sustainableprosperity.ca/dl1026&display>

For more information please visit: http://pricecarbonnow.org/does-carbon-pricing-work

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