The future of the BC carbon tax -- and what it could mean for the United States

ClimateWire reports that the BC Carbon Tax, enacted in 2008, has survived three years and $848 million of carbon taxation [ClimateWire story]. Because the carbon tax is so small, and because teasing out the effect of the carbon tax is so difficult in changing economic times, it is hard to say how much effect the carbon tax has had on greenhouse gas emissions in the province. But it would be petty to begrudge the bits of anecdotal evidence that seems to indicate that for some (like the University of Northern British Columbia or the University of British Columbia), it helps tilt some decisions towards energy conservation and lower emissions.

Perhaps the most compelling and practical piece of punditry about carbon taxes is that in the near term, the pressure to reduce deficits will inevitably place the spotlight on carbon taxes. Barry Rabe of the Ford School of Public Policy at the University of Michigan is the latest of several (including myself) to point out that there aren't a lot of attractive options in terms of reducing spending or raising revenues, so taxing carbon might not seem so contemptible after all. It really is not such a hard sell to say that taxing carbon is better than taxing labor.

The one thing omitted in the otherwise serviceable reporting job by ClimateWire was an analysis of the provincial politics of the BC carbon tax. For Americans, the "Liberal" Party in BC, the one that ushered in the carbon tax, is actually the not-quite-as-liberal of the two political parties in the province. As a matter of fact, former Premier (that's Canadian for "Governor") Gordon Campbell, who really pushed through the BC carbon tax somewhat autocratically, is really politically a lot like former California Governor Arnold Schwarzenegger, if perhaps even a bit more conservative.

If Republicans in the United States don't learn anything from the Republican former California governor, maybe they can learn something from Gordon Campbell. He resigned late last year amid a number of political missteps, but the carbon tax was not chief among them. What they can learn from Campbell is that the more conservative party can split the more liberal party by instituting a carbon tax. For true conservatives, (and not Tea Party hacks), a carbon tax is really consistent with many of their core principles: taxing consumption is better than taxing productivity (income), it is a non-regulatory way of reducing emissions (i.e., it doesn't involve EPA), and it places environmental protection on the same level as other economic considerations, a mortal sin in environmental circles. In other words, it allows people to "pay to pollute," something that rankles some environmentalists, though none have really come out against something like a carbon tax. West Coast Environmental Law, in fact, came out in favor of the BC carbon tax in 2008, angering some of its traditional left-wing supporters. So some have seen the political costs incurred by Campbell and the BC Liberal Party, but some have begrudgingly given it credit for leading, when no other jurisdiction in North America has imposed a carbon tax, and neither the Canadian or US federal government has done anything to reduce greenhouse gas emissions.

There is a new party in waiting to emerge in the United States. It draws inspiration from the Tea Party for its anti-establishment populism, but draws from a much more educated, affluent, and practical centrist population. This constituency is considerably more sophisticated than most Tea Party supporters and almost all Tea Party politicians, believes that global climate change is a substantial risk, and is willing to spend money to reduce greenhouse gas emissions. Like Tea Party members, they are concerned about government deficits. Hence a carbon tax. When the dust settles in ... a few months or years, a carbon tax will emerge as a very practical option.