The Carbon Tax

The BC carbon tax is levied against each tonne of carbon emitted by burning fossil fuels.  Like the tradable permits, the carbon tax puts a price on environmental degradation.  Unlike the tradable permit system, a carbon tax is easy to administer but offers no guaranteed level of emissions reductions.

The BC carbon tax is revenue neutral.  This means that the government of BC is redirecting all of the revenues generated through this tax back to tax payers via income tax breaks.  The purpose of the carbon tax is to modify behaviours, in this case reducing carbon emission generating activities, not to generate revenues (BC Ministry of Finance, 2012).