Working paper by Sileci, L (2024)
Abstract: This paper assesses the air quality and environmental equity impacts of the carbon tax introduced in the Canadian province of British Columbia in 2008. The author finds that the carbon tax has reduced PM2.5 (fine particulate) emissions by between around 5 and 11%. The precise degree of reduction varies from place to place, with larger reductions in areas with lower rates of pre-existing pollution, lower population density, lower material deprivation, and higher income. While all areas experience substantial positive co-benefits from the carbon tax in terms of reduced air pollution hazard rates, quantified at CA$198 per capita, the results imply a widening of the pre-existing environmental justice gap. This dynamic shows one element of how a carbon tax can be regressive in terms of the distribution of its impacts across society, which policymakers can seek to redress through careful policy design.
