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02-2016 Jobs and Climate Policy: Evidence from British Columbia's Revenue-Neutral Carbon Tax

Akio Yamazaki
Wednesday, September 21, 2016
This paper examines the employment impact of British Columbia’s revenue-neutral carbon tax implemented in 2008. While all industries appear to benefit from the redistributed tax revenues, the most carbon-intensive and trade-sensitive industries see employment fall with the tax, while clean service industries see employment rise. By aggregating across industries I find the BC carbon tax generated a small but statistically significant 2 percent increase in employment over the 2007-2013 period. This paper provides initial evidence showing how a revenue-neutral carbon tax may not adversely affect employment.

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