Salience of Carbon Taxes in the Gasoline Market

Authors

Nicholas Rivers, University of Ottawa
Brandon Schaufele, Ivey School of Business

Document Type

Article

Publication Date

11-2015

Volume

74

Journal

Journal of Environmental Economics and Management

First Page

23

URL with Digital Object Identifier

https://doi.org/10.1016/j.jeem.2015.07.002

Last Page

36

Abstract

We demonstrate that the carbon tax imposed by the Canadian province of British Columbia caused a decline in short-run gasoline demand that is significantly greater than would be expected from an equivalent increase in the market price of gasoline. That the carbon tax is more salient, or yields a larger change in demand than equivalent market price movements, is robust to a range of specifications. As a result of the large consumer response to the tax, we calculate that during its first four years, the tax reduced carbon dioxide emissions from gasoline consumption by 3.6 million tonnes.

Notes

This is the author-approved version of an article published in the Journal of Environmental Economics and Management. The final published version can be found at https://doi.org/10.1016/j.jeem.2015.07.002

Creative Commons License

This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.