B.C. residents will pay more at the pump for gasoline, diesel fuel and propane Thursday as the carbon tax jumps more than one cent per litre. (CBC)

The HST is not the only new levy that B.C. residents start paying Thursday.

The province's carbon tax on gasoline and other fuels also goes up more than one cent per litre, meaning higher prices at the pump, at home and elsewhere, according to the Canadian Taxpayers Federation.

"Keep in mind that almost everything that we purchase, from food to clothing, is transported by trucks," said federation spokeswoman Maureen Bader. "And businesses will also be passing that cost increase down."

'I think the carbon tax will need to continue to rise to have a bigger effect.'—Researcher Eric de Place

The carbon tax on gasoline goes up 1.12 cents, to 4.45 cents per litre. The carbon tax on diesel fuel increases 1.27 cents, to 5.11 cents a litre.

There is no harmonized sales tax on fuel in B.C.

Natural gas and other fuels like propane, kerosene and home heating oil are also subject to carbon tax increases Thursday.

The B.C. government says putting a price on emissions will encourage people to reduce their use of fossil fuels. But there's little evidence that's happening, said Bader.

Gasoline consumption up

A report released Wednesday on gasoline consumption supports her opinion.

The Sightline Institute, a Seattle non-profit research group, found a 10 per cent increase in per capita gasoline sales in the province in 2009, the single largest increase in B.C. in at least 30 years.

Lower fuel prices globally and a rise in economic activity before the 2010 Winter Olympics are the main reasons for the increase, according Sightline's report.

The carbon tax should be viewed as only one element of a larger plan to reduce use of fossil fuels, said Eric de Place, a senior researcher with Sightline.

"I think the carbon tax will need to continue to rise to have a bigger effect," said de Place.

"It also needs to be supplemented with other policies, like investments in renewable energy, investments in transit, and complemented by not making certain investments like highway expansion."

Suzuki Foundation support

At least one high-profile environmental organization supports the carbon tax as a fossil fuel deterrent.

There are indications the levy is forcing people to go green, the David Suzuki Foundation's Nicholas Heap told CBC News.

"[The carbon tax] is already factoring in to decision-making," said Heap. "It's a constant long-term price signal. ... People know that the price is going to rise for years in advance."

B.C.'s Minister of State for Climate Action, John Yap, agreed the tax is working, although he could not point to statistical evidence.

"It is early days in starting down this path," Yap said. "So far we have heard of anecdotal evidence that people are aware of the carbon tax and are taking steps to reduce the use of fossil fuels."

B.C.'s carbon tax will go up to more than six cents on a litre of gasoline in July 2011 and to more than seven cents a litre in July 2012.

With files from the CBC's Robert Zimmerman and Priya Ramu