Now, BC’s gas sales are at about 4.9B litres with a $35 carbon tax, and all that has happened is the highest prices for gas in BC history.This gives us some proxy for arguing that the income effect has overpowered the substitution effect, and that rebates have been counter productive.I predict that all we will see is rising gas sales around the country, but higher prices. And ultimately, it will mean no reduction in carbon emissions.This is yet another reason why the carbon tax + dividend model is a badly implemented economic idea.I would argue that they should because it’s a part of consequential loss. You’re incurring these costs because of the fact that they breached their end of the deal.
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