Does a Carbon Tax Reduce CO2 Emissions? Evidence from British Columbia

Felix Pretis

Environmental & Resource Economics, 2022, vol. 83, issue 1, No 6, 115-144

Abstract: Abstract Using difference-in-differences, synthetic control, and introducing a new break-detection approach, I show that the introduction of North America’s first major carbon tax has reduced transportation emissions but not ‘yet’ led to large statistically significant reductions in aggregate CO2 emissions. Proposing a new method to assess policy based on breaks in difference-in-differences using machine learning, I demonstrate that neither carbon pricing nor trading schemes in other provinces are detected as large and statistically significant interventions. Instead, closures and efficiency-improvements in emission-intense industries in untaxed provinces have reduced emissions. Overall, the results show that existing carbon taxes (and prices) are likely too low to be effective in the time frame since their introduction.

Keywords: Carbon tax; CO2 emissions; Regulation; Break detection (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://link.springer.com/10.1007/s10640-022-00679-w Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:enreec:v:83:y:2022:i:1:d:10.1007_s10640-022-00679-w

Ordering information: This journal article can be ordered from
http://www.springer. ... al/journal/10640/PS2

DOI: 10.1007/s10640-022-00679-w

Access Statistics for this article

Environmental & Resource Economics is currently edited by Ian J. Bateman

More articles in Environmental & Resource Economics from Springer, European Association of Environmental and Resource Economists Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().