Canada’s Environment Minister recently announced that Canada will introduce a national carbon price by the end of 2016. This major action to reduce their greenhouse gas emissions was made possible by years of groundwork laid by individual provinces. Beginning in 2007 when Alberta implemented a carbon pricing system, one after another, provinces followed suit. British Columbia implemented a revenue-neutral carbon fee-and-rebate in 2008, and have had enormous success in cutting carbon emissions while growing their economy.

We can learn a lot from Canada on carbon pricing. In the same way the policy started local and spread to a national scale, Massachusetts can lead the way for carbon pricing to take hold across the US.

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Press Coverage:

British Columbia officials say carbon tax is working
— CommonWealth, April 13, 2015

Barrett Draws on Canadian Experience to Promote Carbon Fees
— State House News Service, April 13, 2015

BC Leaders Bring Their Insights to Massachusetts

In 2008, British Columbia adopted North America’s first carbon fee and rebate policy on carbon pollution. The fee was imposed on fossil fuel wholesalers, and since it eventually would be passed through the economy, all of the revenue was passed directly to households and businesses.

The goal was not to increase the cost of living or even the cost of energy.  The goal was to increase the cost of fossil fuels, and then through the rebates, to help everyone in the province shift toward more reliable and less volatile renewable energy.  The tax started small and increased gradually up to a limit, giving people and employers a chance to plan how they could take advantage of the new system.  The less fossil fuels they used, the more they would come out ahead.

Seven years later, this system has been such a success that British Columbia is hailed around the world as a  model of smart climate change policy.  Carbon pollution is down, and the province’s economy has out-performed the rest of Canada. The carbon tax now funds more than a billion dollars a year in other tax cuts, resulting in one of Canada’s lowest corporate tax rates and lowest personal income tax rates. The policy has always enjoyed majority support, as high as 64 percent, and the party that enacted the tax – the more conservative of British Columbia’s two major parties – has won re-election.  Twice.

Now, British Columbia is inspiring Massachusetts and other U.S. states to join them in showing the world how to address climate change.  We were very happy to welcome BC leaders to Boston on April 12 and 13.  In a series of meetings and events – with business leaders, legislative leaders at the State House, and at a public event at MIT – they told us exactly how they did it and how it has worked.  You can learn more by watching the videos and reading the reports below.

Pricing Carbon to Combat Climate Change: What Can We Learn from British Columbia?
Full length, 1:34:53
April 13, MIT Morss Hall
View Program

Business Leaders Breakfast
Embracing the Future: The Economic Success of British Columbia’s Carbon Pricing Policy
Full length, 1:07:45
April 13, Mintz and Levin
View Program

How the BC carbon tax developed, how it works (2:13)

Mike Bernier, Parliamentary Secretary, Ministry of Environment

Carbon pricing is the new normal (.59)
Merran Smith, Executive Director, Clean Energy Canada

“The jurisdictions that are already pricing carbon now is 42% of the world’s GDP. Chile and 5 provinces of China have committed to come on by 2016. At that point, over 50% of the world’s GDP [will be] pricing carbon. This is not a niche or fringe conversation. This is mainstream. We like to say that carbon pricing is the new normal.”

This is a market problem, it should be a market solution (3:52)

Ross Beaty, Founder and Chair of PanAmerican Silver Corp. and Alterra Power Corp.

“The positive impact of a cost is that it stimulates good engineering and good entrepreneurship to reduce those costs as much as you can, which, of couse, is usually what happens.  The result is a longer-term more sustainable operation.  That’s been a very, very real thing in [BC industries that now are] using different kinds of energy generation other than fossil fuels, all to aim at lower costs, smarter, better ways of going about business.

This is a great business solution to the problem of carbon emissions.  It has really worked, I think.  Companies are operating with lower emissions and yet they’re operating successfully, we’re growing our economy, it has not been a negative, it hasn’t been a drag, there is now 6 years of experience proving this.  I think it’s a great model for Massachusetts.”

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MIT Chancellor Cynthia Barnhart, second from right, back row, and panelists at MIT Carbon Pricing Forum.

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Sen. Mike Barrett and Rep. Frank Smizik briefed legislators about carbon pricing legislation in Massachusetts.

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The British Columbia delegation at a recepton in Boston on April 12.

More on the Carbon Pricing Success in British Columbia

“We’ve gained that reputation as a place that’s very competitive for business and investment, while holding industry to a high environmental standard. I think that’s the kind of province that most British Columbians want us to be.”

— Premier Christy Clark, quoted in Clean Energy Canada, “How to Adopt a Winning Carbon Price,” 2014.

“British Columbia is home to a growing clean technology sector, with more than 150 firms in operation in 2012—accounting for 22 percent of Canada’s clean technology presence in a province with 13 percent of Canada’s population.”

— Source:  Clean Energy Canada, “Proof Positive: The Mechanics and Impacts of British Columbia’s Carbon Tax,” 2014

“[M]ost Business Council members support the concept of pricing GHG emissions as part of a longer-term strategy to move to a lower carbon economy….In more specific terms, the Business Council generally supports a number of carbon tax design criteria: the broad application of carbon pricing across the economy, periodic reviews of the tax in light of developments in other jurisdictions, and ensuring that any increases in the tax come in small, predictable increments.”

— Business Council of British Columbia, Submission on the Provincial Carbon Tax, September 5, 2012. Cited in “Proof Positive: The Mechanics and Impacts of British Columbia’s Carbon Tax,” Clean Energy Canada, 2014.

“The latest numbers from Statistics Canada show that B.C.’s policy has been a real environmental and economic success … Far from a being a “job killer,” it is a world-leading example of how to tackle one of the greatest global challenges of our time: building an economy that will prosper in a carbon-constrained world.”

— Ross Beaty, Richard Lipsey and Stewart Elgie, “The Shocking Truth About B.C.’s Carbon Tax: It Works
Toronto Globe and Mail, July 9, 2014.