It seems to me it just makes people pay more tax and doesn’t actually help climate change. I researched the Canadian carbon tax btw
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If you buy a vehicle that gets better mileage, or is emission free, you pay less tax.
http://theconversation.com/heres-what-the-carbon-tax-means-for-you-114671
It does not reduce emissions but that money is invested someway in order to reduce the damages done by carbon..
“Carbon tax” can refer to a couple different things, but assuming you’re talking about a tax levied mainly on consumer gas purchases, by making it more expensive to run gas vehicles (especially less efficient trucks, SUVs, etc.), the tax encourages people to consider alternative transportation (bicycles, buses, trains, etc) and consider buying more efficient vehicles (hybrids, electric cars, or even just a smaller car) next time they need to buy a car. These relatively small changes, made in large numbers, can quickly add up to sizeable emissions reductions.
For the wealthier, carbon taxes can also affect operating costs for aircraft, especially private jets.
The carbon tax is collected at the pump from consumers. The tax collected is remitted by the gas company to the government, along with any fees and penalties the gas company for its own emissions.
Its a fee to encourage less fuel usage: taking public transit, buying more efficient vehicles. _But wait, the government is giving the tax collected from consumers back in the form of the carbon tax credit on your income taxes?_ Yes, but it still makes you think about it because while after your refund comes back you’re net zero gain/loss, but from when you buy gas until you get your refund you’re out that money. It still encourages you to use less fuel.
It also encourages manufacturers and producers and commercial transport companies to use less fuel too, and they’re perhaps the bigger contributor.
Some proposed carbon taxes tax fuels being taken out of the ground based on how much CO2 it would produce. Coal produces a lot of CO2 per weight, while natural gas produces less.
Taxing these fuels makes them more expensive, so the free market will prioritize cheaper sources of energy like wind and solar that are not taxed.
It make solution that emit less carbon more competitive. For example, let say that your product cost 500$ to produce and create some carbon emission. You could switch to a method that produce less carbon, but that would cost 520$ to produce it. Now if your carbon taxe is 35$ and by using the new method you can drop that to 12$, then the old method actually cost you 535$, while the new method would cost you 532$ which is cheaper and incentive you to switch to the method that cost less carbon.
Of course this work overtime, it doesn’t reduce carbon the moment you create that tax, it just slowly change the way people do business and consumer buy product.
if you have a limited pot of money (say $100) and you can only spend it on two items (bread and alcohol) and the price of alcohol is increased by a special “don’t drink too much tax”, the theory says that a rational consumer will likely be spending less on alcohol.
Generally speaking, there are only so many carbon goods you can buy with $100. If the cost of those carbon goods goes up, then you can buy fewer of them. This means that fewer are produced which reduces the amount of carbon emitted. It’s not that there is less carbon emitted per item produced, but there are less items produced overall because each one is more expensive to produce due to the tax.
Well it’s economics.
Pollution in the air is dubbed a *negative externality.* That meaning that the production, or the use, of fossil fuels damages a 3rd party. That 3rd party being *us* seeing as we’re breathing in that polluted air. A negative externality is only present in the face of overproduction or overconsumption. In this case, they’ve initiated a tax on those firms, and on people, to compensate for that overabundance of carbon. An effective tax in the face of a negative externality should incentivize firms and people to produce *less* of what *specifically* is being taxed, the increased cost of producing more with fossil fuels will prevent firms from producing more (this tax seems to be aimed more towards firms, which is businesses), which should decrease carbon levels, the government hopes that the supply curve of fossil fuels shifts to the left. *Which means less.*
www.caclimateinvestments.ca.gov
In California, part of the cap and trade dollars fund specific programs as grants if a project is eligible. Most of these are administered by or in partnership with state agencies which then track GHG reduction using methodology tools.
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