: Carbon Taxation and the Double Dividend Hypothesis: A Case Study Of British Columbia

Rian Stumpe

Student thesis: Termpaper


This project is interdisciplinary research combining economics with PSR. The paper is a case study of British Columbia, Canada, investigating the attempt to have both a decrease in carbon emissions, with the possibility of economic growth. Climate change is debatably the most prominent issue of our time. Carbon emissions have continued to rise at an unprecedented rate. Some scientists are suggesting that change must happen sooner than later. In response to this, the province of British Columbia, Canada has implemented a tax on carbon. This is an interesting case study opportunity, as it is the first of its kind within North America. This carbon tax was used to reduce other taxes within the province, in a framework that mimics the ‘double dividend hypotheses. Whereby, This paper seeks to use critical realism to investigate the main mechanisms during 2007-2012 being affected by the carbon tax, how individuals have responded to this change, and interpret the results though the framework of the double dividend theory. The results of the analysis show that the carbon tax has been successful at decreasing the consumption of fuels within the province. The analysis also highlights that there has been a decrease in Canada that cannot be attributed to a tax on carbon; therefore there are other factors at play within both regions. The tax has been used to lower income taxes, which according to the double dividend hypothesis and its sub theories, the lowered income taxes have been a contributor to economic expansion within British Columbia. However, when the results are compared to Canada, the results instead, suggest an outcome that has been undesirable, a contraction of the supply of labor, all things equal

EducationsBasic - International Bachelor Study Program in Social Sciences, (Bachelor Programme) Basic
Publication date2 Jun 2014
SupervisorsGad Linni


  • Economy
  • Carbon Tax