What is a carbon tax?

carbon tax is a tax on greenhouse gas emissions, usually carbon dioxide. The tax is designed as a financial means of checking and restricting these emissions. It is based on the scientific theory that the excessive level of such gases is imprisoned in the Earth's atmosphere, which can lead to an undesirable temperature rise.

The purely economic basis is designed to be responsible for the social costs of these emissions. These social costs are an attempt to determine the financial value so that it reflects the damage that the company has not taken into account, which is not charged when the company sets the prices of its goods and services. In practice, such a number can only be an estimate, while the determination of tax levels must also include political concerns. In some cases, carbon tax is used for all emissions. In others, companies are awarded a limit and then pay tax for all emissions over this level. Such limits can be gradually reduced every year, so companies have more time to change their technology product. At pThe reverse view may seem logical to say that carbon tax is double effective because it can reduce emissions while raising money for expenditure for environmental projects. In practice, this cannot work in both ways: if the tax reaches its set an goal, the amount of increased income will decrease or even reaches zero.

One of the main disadvantages of the carbon tax system is that it is imposed as a national measure trying to solve the international problem. There is a risk that companies that risk paying higher taxes will move to other countries that have lower taxes or even any tax -related taxes. In this situation, the National Government may establish obligations for imports from this country to create a shortage.

The most common alternative to carbon tax is the scheme of the ceiling and trade. Within this system, companies receive a specified level of emissions that everyone canyear to produce. Those who have a lower level of emissions than their goal are obtained by credits. Then they can sell these credits to other companies, which is the only way to legally exceed their target level. The idea is that the system forces the "costs" of emissions to be built into the production process.