Carbon pricing with regressive co-benefits: evidence from British Columbia’s carbon tax

Lorenzo Sileci

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

Abstract: I assess the air quality and environmental equity impacts of the 2008 carbon tax in British Columbia. Using high-resolution data and a synthetic difference-in-differences strategy, I find that the carbon tax has reduced PM2.5 emissions by 5.2-10.9%. This result is heterogeneously distributed, with larger reductions in areas with lower baseline pollution, lower population density, lower material deprivation, and higher income. While all areas experience substantial positive co-benefits in terms of reduced air pollution hazard rates, quantified at $198 per capita, my results imply a widening of the pre-existing environmental justice gaps. This dynamic represents an additional dimension of carbon tax regressiveness.

Keywords: carbon tax; air quality; PM2.5; co-benefits; environmental justice; air pollution; British Columbia; Canada; climate policy; health impacts; social impacts (search for similar items in EconPapers)
JEL-codes: H23 Q53 Q58 (search for similar items in EconPapers)
Pages: 57 pages
Date: 2023-12-05
New Economics Papers: this item is included in nep-ene, nep-env, nep-hea and nep-pub
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:121047

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