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Assignment on Carbon Tax

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Added on  2020-05-16

Assignment on Carbon Tax

   Added on 2020-05-16

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Running head: TAXATION LAWCarbon TaxName of the student:Name of the university:Author note
Assignment on Carbon Tax_1
1TAXATION LAWTable of ContentsIntroduction:...............................................................................................................................2Discussion:.................................................................................................................................2Conclusion:................................................................................................................................4Bibliography:..............................................................................................................................5
Assignment on Carbon Tax_2
2TAXATION LAWIntroduction:Carbon tax is levied on certain fossil fuels such as coal, oil and natural gas. Themain objective of the tax is to protect our society from carbon ignition1. It is scientificallyproved that excessive emission of Carbon Di Oxide caused serious damage to the climate andthis tax compels the users of the fuel to pay for all the damages. It also motivates the users tomove to non-carbon fuels. Discussion:The main driving force of the fossil fuel is carbon and hydrogen. When theenergies are being used, Carbon Di Oxide emitted from it and that caused dangerous impactson the atmosphere2. Most of the CO2 are emitted from the coal and carbon tax helps torestrict the excessive usage of CO2. Carbon tax helps the carbon fuel users to restrictexcessive use of carbon fuels. It also helps to fuel the economy by increasing the revenuecriteria of the carbon fuel. The nature of the tax can either be Pigovian or regressive. In mostof the OECD countries, carbon taxes are levied indirectly. It can be observed that the taxesare levied on the motor cars and energy products. The main reason of global warming isexcessive use of Carbon Di Oxide3. From the theory of Economics, carbon tax is sort ofpollution tax and act as a price instrument which is imposed on the Carbon emission. Thenature of the tax is of negative externality and therefore, known as pigovian tax which isequal to the marginal damage cost. Besides the economical impacts, carbon taxes havecertain social cost which had been established for the first time in Reagan administration in1Aghion, Philippe, et al. "Carbon taxes, path dependency, and directed technical change: Evidence from the autoindustry."Journal of Political Economy124.1 (2016): 1-51.2Baranzini, Andrea, and Stefano Carattini. "Effectiveness, earmarking and labeling: testing the acceptability of carbon taxeswith survey data."Environmental Economics and Policy Studies19.1 (2017): 197-227.3Chiu, Fan-Ping, et al. "The energy price equivalence of carbon taxes and emissions trading—Theory andevidence."Applied energy160 (2015): 164-171.
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