How a Carbon Tax Can Solve Climate Change - Deepstash
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Is the World Ready for Carbon Prices?

Is the World Ready for Carbon Prices?

Mitigation of climate change is a global responsibility that all nations take part in. 

Being in an era where industrialization and modernization exacerbate the condition of our environment, among the measures that policymakers proposed to ease the impact of this environmental phenomenon is to impose a Pigouvian tax on firms and industries for each ton of greenhouse gases that they emit through a taxation policy called carbon taxation.

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What are Carbon Taxes?

What are Carbon Taxes?

Carbon taxes are government fees imposed on carbon-emitting firms and businesses for each ton of greenhouse gases they emit.

According to Parry (2019), countries will greatly benefit from carbon taxation in reducing greenhouse gases; however, what Parry fails to cover in his study is how this would affect the economies of the developing countries.

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The Fault in Our Taxes: Carbon Pricing vs. Developing Countries

The Fault in Our Taxes: Carbon Pricing vs. Developing Countries

It is not fair that developing countries would also be imposed with carbon taxes without further research on its economic and social implications, including how our the agricultural and transportation services sectors, being two of the largest sources of the livelihood of their citizens, would benefit from this policy.

For instance, in the Philippines, carbon taxation will increase the accumulated transaction costs suppliers will shoulder, including the costs incurred by transportation, machinery, and consumption of fertilizers; thus, increasing the prices of our agricultural products.

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...so is the "whole" world ready for Carbon Pricing?

...so is the "whole" world ready for Carbon Pricing?

A solution may be proposed to the burden, which is to allocate the taxes collected from carbon pricing in subsidizing the needs of agricultural workers; however, will these subsidies be enough to cover agricultural emergencies such as, for instance, flooding? Furthermore, developing countries are challenged by high energy tariffs which are no longer within the scope of carbon taxation.

The premise of carbon taxation does wonders in reducing GHGs; but there are countries that are yet to prepare for its consequences on the livelihood of its citizens.

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CURATED BY

emay

ENFJ 💮 An economics-psychology student navigating her way through life. I'm really an introvert based on social standards.

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