British Columbia’s revenue-neutral carbon tax: A review of the latest “grand experiment” in environmental policy

Murray, Brian C.; Rivers, Nicholas

doi:10.1016/j.enpol.2015.08.011

Cited by 280 publications

(172 citation statements)

References 15 publications

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“…Similarly, Kallbekken and Saelen (2011) have argued in favor of the use of trial periods, based on the successful example of the Stockholm congestion charge (see also Cherry et al 2014). In the specific case of carbon taxes, Murray and Rivers (2015) show based on poll data how resistance against British Columbia's carbon tax substantially decreased after its introduction, with positive spillovers to the rest of Canada. In the case under consideration, we note that although Switzerland already has a carbon tax on heating and process fuels, an important fraction of the population is not aware of its existence (and thus of its redistribution policy).…”

Section: Gradual Introduction and Informationmentioning

confidence: 99%

Green Taxes in a Post-Paris World: Are Millions of Nays Inevitable?

Carattini

Baranzini

Thalmann

et al. 2017

Environ Resource Econ

196

135

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Turning the Paris Agreement's greenhouse gas emissions pledges into domestic policies is the next challenge for governments. We address the question of the acceptability of cost-effective climate policy in a real-voting setting. First, we analyze voting behavior in a large ballot on energy taxes, rejected in Switzerland in 2015 by more than 2 million people. Energy taxes were aimed at completely replacing the current value-added tax. We examine the determinants of voting and find that distributional and competitiveness concerns reduced the acceptability of energy taxes, along with the perception of ineffectiveness. Most people would have preferred tax revenues to be allocated for environmental purposes. Second, at the same time of the ballot, we tested the acceptability of alternative designs of a carbon tax with a choice experiment survey on a representative sample of the Swiss population. Survey respondents are informed about environmental, distributional and competitiveness effects of each carbon tax design. These impacts are estimated with a computable general equilibrium model. This original setting generates a series of novel results. Providing information on the expected environmental effectiveness of carbon taxes reduces the demand for environmental earmarking. Making distributional effects salient generates an important demand for progressive designs, e.g. social cushioning or recycling via lump-sum transfers. The case of lump-sum recycling is particularly striking: it is sufficient to show its desirable distributional properties to make it one of the most preferred designs, which corresponds to a completely novel result in the literature. We show that providing detailed information on the functioning of environmental taxes may contribute to close both the gap between acceptability ex ante and ex post and the gap between economists' prescriptions and the preferences of the general public.

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Section: Gradual Introduction and Informationmentioning

confidence: 99%

Green Taxes in a Post-Paris World: Are Millions of Nays Inevitable?

Carattini

Baranzini

Thalmann

et al. 2017

Environ Resource Econ

196

135

View full text Add to dashboard Cite

show abstract

“…increasing energy taxes would lead to improvements in energy intensity but in the short term could infl uence national competitiveness. However, an example from British Columbia demonstrates that well-designed environmental taxes can both be environmentally eff ective and have a minimal eff ect on growth and low-income earners (Murray and Rivers, 2015).…”

Section: Discussionmentioning

confidence: 99%

Assessment of the Environmental Tax System in Latvia

Jurušs¹,

Brizga²

2017

NISPAcee Journal of Public Administration and Policy

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Environmental taxes should play an important part in environmental policy as they help to internalize externalities, reduce damage, and increase the quality of life; besides they allow raising revenue for national and local governments. Th e aim of this paper is to evaluate environmental eff ectiveness, economic effi ciency, equity impact, administrative feasibility and cost, and political acceptability of environmental (energy, transport, and natural-resource) taxes in Latvia. Th e study is based on desk research. Th e results demonstrate little evidence that existing environmental taxes lead to a signifi cant reduction in environmental pollution and waste fl ows, but they have a signifi cant fi scal eff ect. Most of the environmental taxes in Latvia apply direct and indirect subsidies, but most of the revenue comes from taxes on energy and transport. Environmental tax rates in Latvia are the result of political compromise and are not backed by the research on environmental costs of the particular activity. Th is paper fi lls the gap in environmental policy evaluation by looking at the performance and eff ectiveness of environmental taxes in Latvia.

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“…Research suggests that resistance to innovative environmental policy—whether by citizens, firms, NGOs, or politicians—may be driven by lack of knowledge about how it exactly functions and which impacts it generates . Ex post , that is, based on experience with implemented new policies, perceptions may dramatically change so that social–political acceptability increases . Hence, imperfect information is an important obstacle to the implementation of carbon pricing, particularly as it allows political‐ideological motivations to dominate.…”

Section: Introductionmentioning

confidence: 99%

Carbon pricing in climate policy: seven reasons, complementary instruments, and political economy considerations

Baranzini

Bergh

Carattini

et al. 2017

WIREs Climate Change

270

124

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Carbon pricing is a recurrent theme in debates on climate policy. Discarded at the 2009 COP in Copenhagen, it remained part of deliberations for a climate agreement in subsequent years. As there is still much misunderstanding about the many reasons to implement a global carbon price, ideological resistance against it prospers. Here, we present the main arguments for carbon pricing, to stimulate a fair and well‐informed discussion about it. These include considerations that have received little attention so far. We stress that a main reason to use carbon pricing is environmental effectiveness at a relatively low cost, which in turn contributes to enhance social and political acceptability of climate policy. This includes the property that corrected prices stimulate rapid environmental innovations. These arguments are underappreciated in the public debate, where pricing is frequently downplayed and the erroneous view that innovation policies are sufficient is widespread. Carbon pricing and technology policies are, though, largely complementary and thus are both needed for effective climate policy. We also comment on the complementarity of other instruments to carbon pricing. We further discuss distributional consequences of carbon pricing and present suggestions on how to address these. Other political economy issues that receive attention are lobbying, co‐benefits, international policy coordination, motivational crowding in/out, and long‐term commitment. The overview ends with reflections on implementing a global carbon price, whether through a carbon tax or emissions trading. The discussion goes beyond traditional arguments from environmental economics by including relevant insights from energy research and innovation studies as well. WIREs Clim Change 2017, 8:e462. doi: 10.1002/wcc.462 This article is categorized under: Climate Economics > Economics of Mitigation

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British Columbia’s revenue-neutral carbon tax: A review of the latest “grand experiment” in environmental policy

Cited by 280 publications

References 15 publications

Green Taxes in a Post-Paris World: Are Millions of Nays Inevitable?

Green Taxes in a Post-Paris World: Are Millions of Nays Inevitable?

Assessment of the Environmental Tax System in Latvia

Carbon pricing in climate policy: seven reasons, complementary instruments, and political economy considerations

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