A carbon tax is a tax imposed on the carbon content of fuels. It is a form of carbon pricing. Carbon taxes are a possible cost-effective means of reducing greenhouse gas emissions. From an economic outlook, carbon taxes are a type of Pigovian tax.They help to address the problem of emitters of greenhouse gases not face the full social costs of their actions. Carbon taxes can be a degenerating tax, in that it may directly or indirectly affect low-income groups disproportionately. The regressive impact of carbon taxes could be addressed by using tax revenues to favor low-income groups.
A number of countries have implemented carbon taxes or energy taxes that are related to carbon content. But some are taxed on energy products and motor vehicles rather than on carbon dioxide directly. In June 2010, Julia Gillard defeated Rudd in a leadership challenge thus becoming Prime Minister of Australia. Shortly afterwards she called a federal election. During the election campaign Gillard stated that she supported a price on carbon emissions and that she would prosecute the case for action for as long as she needed to win community support. However, she also indicated that she would not introduce carbon pricing until there was a sufficient consensus on the issue, and she specifically ruled out the introduction of a "carbon tax".(Paul Kelly and Dennis Shanahan, 2010) When it was introduced on July 1, 2012 its primary goal is to reduce the country’s total emissions of greenhouse gases (GHGs). Initially it is only the Australia’s first 500 highest polluting companies that were expected to pay a flat charge of $23 AUD per ton of CO2-e produced. Now I think the number of companies that are being taxed have increased. And this rate is estimated to change and likely to increase to 2.5 percent above inflation rate annually. The Australian government thought that it will be a solution to the problem of climate change and an investment in a clean energy source.As we know, the country has the highest per capita carbon footprint in the world because it merely relies on coal fired electricity station. These stations are responsible for 40 percent of the nation’s emissions. The government has set a target of generating 20 percent of Australia’s power from renewable energy sources by 2020. (Sridhar, 2012) While, implementing the carbon tax may be a move towards counteracting the country’s lag in switching emissions to renewable energy, making carbon–neutral investments and establishing climate change best practices there are its consequences for majority of Australia’s household and industries. In other countries, carbon tax has been implemented to fund their clean energy and energy savings projects. Like in India, coal is used to power more than half of the country’s electricity generation. Implementation of a carbon tax that was introduced in India on July 2010 has not been favored the rates by industry bodies because they fear that this will result to a higher price of coal and it could trigger inflation. The clean energy tax was imposed to help finance the National Clean Energy Fund (NCEF). While many in India remain hesitant, carbon tax is a step towards helping the country meets their voluntary target to reduce the amount of carbon dioxide released. In Japan, carbon tax was introduced in October 2012 with a goal to take action in alleviating dangerous climate change. As we know Japan has suffered a massive tsunamiattack on March 2011. The disaster has brought fear all over the world. It has destroyed a lot of Japan’s well-built structures and the loss of lives. The disaster has affected international trade since Japan has been one of the world’s providers of electronicequipment. And people thought that the incident was brought by the neglect of people to care for the environment. Japan wanted to impose carbon tax to help support their environment and their clean energy saving projects. In China, the government also introduced carbon tax...
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