Carbon Tax: Here’s Everything You Wish To Know!

A carbon tax is a fee that a government imposes on any company or individual that burns fossil fuels.

When carbon-rich fuels like coal, oil, gasoline, and natural gas are burned, they produce greenhouse gases.

These gases, such as carbon dioxide and methane, create global warming by heating the atmosphere.

A carbon tax is a way — the only way, really — to have users of carbon fuels pay for the climate damage caused by releasing carbon dioxide into the atmosphere.

The tax is designed to reduce the output of greenhouse gases and CO2, a colorless and odorless incombustible gas, into the atmosphere.

Government Regulation

Under a carbon tax, the government sets a price that emitters must pay for each ton of greenhouse gas emissions they emit.

Businesses and consumers will take steps, such as switching fuels or adopting new technologies, to reduce their emissions to avoid paying the tax.

A number of countries, regions, and local governments around the world have a carbon tax or a something similar like an energy tax related to pollution and emissions.

As of 2021, 35 such tax programs have been implemented across the world.

International appeal

This tax can play a key role in achieving countries’ pledges under the 2015 Paris Agreement, which lays the foundation for international action to combat global warming.

These commitments must be updated every five years.

Carbon Tracking Reductions Around The Globe

The chart provides a broad sense of the effectiveness of different levels of carbon taxes.

Reductions in emissions produced by a $35 a ton carbon tax (green bars) would be more than sufficient to meet the total commitments of the Group of Twenty countries.

Those commitments, shown by the black squares in the chart, represent percentage reductions in projected fossil fuel CO2 emissions in 2030 below baseline levels implied by Paris pledges.

How can I lower my carbon tax?

You can pay less tax by lessening your carbon footprint.

Your carbon footprint represents the amount of greenhouse gases, such as CO2, methane, and nitrous oxide, that you produce during the course of your daily life.

How can I lower my carbon footprint?

There are many things you can do, including

  • eating a plant-based diet
  • buying pre-owned items when possible
  • driving less and
  • supporting politicians and initiatives that support the reduction of greenhouse gasses.
Carbon Tax Implementation Globally
KEY TAKEAWAYS
  • The tax is a fee imposed on companies that burn carbon-based fuels.
  • More than 50 carbon tax and emission trading systems now operate at the regional, national, and subnational levels.
  • A carbon tax would also increase cost of living, therefore giving consumers a reason to switch to clean energy.
  • A carbon tax is giving companies a reason to become more energy-efficient, so as to save money.
  • Carbon Tax also boosts economic growth by substantially increasing government revenue.
The Bottom Line

The times we live in demands individuals and companies to make sustainable choices in life and business operations respectively.

Carbon Tax is a tool for bridging the gap between capitalist and sustainable choices, making life on Earth for Millennials of tomorrow easy.

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