Do carbon taxes kill jobs? firm-level evidence from British Columbia

Deven Azevedo, Hendrik Wolf and Akio Yamazaki

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper investigates the employment impacts of British Columbia’s revenue neutral carbon tax. Using the synthetic control method with firm-level data, we find considerable heterogeneity in employment responses to the policy. We show that firm size matters. In particular, the carbon tax had a negative impact on large emissionintensive firms, but simultaneous tax cuts and transfers increased the purchasing power of low income households, substantially benefiting small businesses in the service sector and food/clothing manufacturing. Furthermore, we find that aggregate employment was not adversely affected by the policy. Our results provide additional insight for the “job-shifting hypothesis” of revenue neutral carbon taxes.

Keywords: carbon tax; employment; unilateral climate policy; firms (search for similar items in EconPapers)
JEL-codes: E24 H23 J20 Q50 (search for similar items in EconPapers)
Date: 2023-01-31
New Economics Papers: this item is included in nep-bec, nep-ene, nep-env, nep-inv, nep-pbe and nep-pub
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Published in Climate Change Economics, 31, January, 2023, 14(2). ISSN: 2010-0078

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http://eprints.lse.ac.uk/117346/ Open access version. (application/pdf)

Related works:
Journal Article: DO CARBON TAXES KILL JOBS? FIRM-LEVEL EVIDENCE FROM BRITISH COLUMBIA (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:117346

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