B.C. reaches carbon-pricing deal with Oregon, Washington

British Columbia's carbon tax will soon have two new American cousins, prompting Environment Minister Mary Polak to suggest B.C.'s groundbreaking tax is helping fuel an expanding green-powered West Coast economic juggernaut.

Polak said Monday's moves by Oregon and Washington states towards a carbon-pricing system similar to B.C.'s seven-year-old carbon tax helps level B.C.'s economic playing field when it comes to green initiatives and building a growing trade partnership.

Polak, who was in San Francisco, said the carbon-pricing agreement follows a meeting of the Pacific Coast Collaborative, which includes California, Alaska, Oregon, Washington and B.C. The four states and one province have a combined population of 53 million people, with a gross domestic product of $2.8 trillion.

Polak said B.C.'s 2008 carbon tax played an instrumental role in convincing the U.S. states to embrace carbon pricing similar to B.C.'s carbon tax.

The B.C. tax adds about seven cents per litre of fuel sold in a effort to reduce harmful greenhouse gas emissions.

Earlier this year, California introduced a carbon pricing mechanism as part of its carbon cap-and-trade system.

"California isn't waiting for the rest of the world before it takes action on climate change," California Gov. Jerry Brown said in a statement. "Today, California, Oregon, Washington and British Columbia are all joining together to reduce greenhouse gases," Brown said.

Polak said introducing carbon pricing throughout North America's west coast was one of the Pacific Collaborative's aim in achieving national and international leadership in fighting climate change without harming economic growth.

But she said the Americans were also keenly interested in the potential electoral fall out from the introduction of a carbon tax or carbon pricing regime.

"That's one of the concerns, can you get a carbon tax, a carbon pricing policy, that not only makes environmental sense, but can be supported by the public at large," said Polak.

B.C. Liberals were re-elected twice since the introduction of the carbon tax in 2008.

Earlier this year, the Liberal government announced a hold on further carbon tax increases, largely because the government felt the tax was levelling an unfair burden on companies paying the tax.

"It's important to be a leader, but you also want to have some followers," Premier Christy Clark said Monday in Vancouver in response to the U.S. announcement.

Polak said the American announcement signals that neighbouring governments and businesses are becoming more comfortable with paying a price to fight climate change.

"What we've been able to show, and what we can show to a greater extent going forward with our jurisdictions, is that this can be good for business and good for the economy," she said.

B.C.'s carbon tax is revenue neutral, which means the money generated by the tax funds personal and business tax cuts. The government states that since 2008, the carbon tax has raised a total of $3.7 billion.

"As a climate action trailblazer, B.C. has been encouraging other jurisdictions to follow our lead, and the agreement signed today is the result of that effort," Polak said in a new release.

Earlier this year, former B.C. environment minister Terry Lake discussed B.C.'s experience with its carbon tax in Oregon with politicians, academics and business leaders.