Evaluating carbon tax policy: A methodological reassessment of a natural experiment

Andrés Arcila Vasquez and John D. Baker

Energy Economics, 2022, vol. 111, issue C

Abstract: Heralded as the grand experiment in carbon tax policy, the Canadian province of British Columbia was on the forefront of North American environmental policy when it implemented a carbon tax in 2008. Despite being well-lauded in the literature, new data suggests that CO2 emissions and fossil fuel consumption have in fact risen in recent years. We test the effectiveness of the policy change using a synthetic control analysis and find that, contrary to the theoretical intuition about carbon taxation, CO2 emissions and gasoline consumption rose in British Columbia relative to the synthetic control. However, we do find there to be a reduced share of economic activity in the energy industry following the policy change.

Keywords: Carbon tax; Climate change; Policy evaluation; Emissions; Gasoline tax (search for similar items in EconPapers)
JEL-codes: Q48 Q53 Q58 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:111:y:2022:i:c:s0140988322002201

DOI: 10.1016/j.eneco.2022.106053

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