CARBON TAX

Carbon Tax

Carbon Tax

Introduction

The carbon tax is a environmental tax on emissions and whose objective is to restrict the emissions of greenhouse gases. The carbon tax imposes the tax liabilities on the people and businesses which are involved in the excessive emissions of the CO2 gases. The implementation of the carbon tax in various countries such as in Australia have promoted the more environmental friendly polices and practices. The carbon tax is designed to encourage changes in behaviour of firms and households to the practices of consumption and purchasing lower carbon energy. Indeed, the current price of fossil fuels does not reflect their negative impacts on the climate.

Australia contributes 1.5% of the global emission of greenhouse gases as compare to the U.S., China, Russia, India and Japan, but it is one of the world's most polluting nations in per capita terms.

The Government of Australia has introduced a carbon tax, which came into force with the announcement of its entry; the country's largest producers are obliged to pay 23 Australian dollars (23.5 U.S. dollars) per tonne of carbon. It is planned that a carbon tax at a fixed rate to be paid within three years, and in 2015, Australia will move to emissions trading and the price will be determined by the market. Under this law, the main CO2 emitters will have to pay a tax from 1st July 2012. Australia has one of the highest CO2 emissions per capita which is one of the highest in the world and is also a major exporter of coal. The country has long been trying to introduce a tax polluters or a system of emissions trading, but its previous attempts have failed every time (Low carbon growth plan for Australia impact of the carbon price package, 2011).

Arguments for Carbon Tax

According to government estimates, the new tax will by 2020 reduce carbon emissions in Australia to 159 million tons per year, which is reported to amount to what will disappear from the roads of the country 45 million cars. At the moment in Australia, where coal plants are widely used and developed in the mining industry is among the leaders on harmful emissions per capita.

The measurement can be seen in the context of overall neutrality of taxation. It is generally proposed to compensate the decrease labour costs for companies. Another compensation is possible for individuals as a redistribution in the form of universal benefit. This is what James Hansen called "100% dividend”. Individuals pay according to their consumption. Those below the average consumer can be winners.

The carbon tax can reduce emissions of CO 2, and also have an indirect effect on other pollutants (directly related to the burning of these fuels and very harmful to human health such as nitrogen oxide and sulphur or carbon monoxide carbon etc), but has no effect on other greenhouse gases like methane. Moreover, reducing the use of fossil fuels could mean a boost for nuclear energy. The carbon tax can have a lasting impact on future investment (McDougall, ...