Taxing Carbon for Development: Lessons from British Columbia

The British Columbia (BC) carbon tax stands out as a model for decarbonizing development because the policy design led to several positive outcomes, including: a net increase in economic growth; a decrease in income inequality and improvement of the rural-urban divide; a significant reduction in GHG emissions; and increased public support of the carbon tax reform over time. These positive economic and environmental impacts are key expectations of climate policy in lower-middle-income countries (LMICs). The features that made this policy successful in North America may generate even greater outcomes in LMICs.