A recent example highlighting the effectiveness of a
carbon tax in practice is that of British Columbia, which is Canada’s third
largest province. British
Columbia implemented its carbon tax in 2008 at a rate of 10 Canadian dollars
per metric ton of CO2. The tax increased by 5 Canadian dollars each year until
it reached 30 dollars in 2012. The tax is currently equal to about 20 U.S.
dollars per ton, and was enacted simultaneously with a reduction in income tax
by 2 percent. The revenue-neutral carbon
tax caused a reduction in fossil-fuel use by 16 percent and British Columbia is
expecting to receive 1.2 billion Canadian dollars from
the carbon tax, returning even more back to firms and families (Porter, 2016). Following
this success of British Columbia, Prime Minister
Trudeau is mandating that all provinces start the process of creating and
levying a detailed carbon tax plan by the year 2018. This announcement
illustrates Canada’s commitment to adopting federal policies that aim to fight
climate change and adhere to the Paris Accord (Guly, 2016).