Pros and Cons of Carbon Tax

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The production and release of carbon dioxide is believed to be at the core of the global warming phenomenon that is occurring today. The cost of carbon is therefore a tax that is imposed on all of society because what one person produces, everyone must pay for in some way. This is where the idea of the carbon tax occurs. It requires a payment for those who contribute excessively to the global carbon footprint.

What Are the Pros of a Carbon Tax?

1. It encourages an alternative.
When the price of producing carbon emissions is high, then producers and consumers look to alternatives in order to save money. This may generate an increase in friendlier renewable energy sources that don’t contribute carbon dioxide to the atmosphere.

2. It raises money.
Alternative energy sources are very expensive still since the technology is relatively new. A carbon tax would help to subsidize research in these fields and perhaps a way could be found to repair the damage caused to the environment.

3. It is socially efficient.
A carbon tax is a usage tax. If households or businesses don’t product carbon outside of a designated allotment, then no tax would be due.

What Are the Cons of a Carbon Tax?

1. It may not change anything.
For a carbon tax to be effective, it must be a global initiative. Otherwise businesses will just transfer their production needs to nations that have not implemented this tax.

2. It could be difficult to track.
Outside of the administration costs, discovering a measurable output level for households and businesses could be difficult. Tracking systems would need to be installed and scientists would need to determine what a “safe” exposure level would be unless the allowable amount of carbon was zero.

3. It could limit economies.
In the developing world, carbon production is high because that’s really their only source of energy. This would stall out poor nations and widen the gap between the rich and poor throughout the world.

Is a carbon tax a good idea? If voluntary limitations aren’t being effective, then alternative options must be explored. By weighing the pros and cons of a carbon tax, we can all determine if this is a path to pursue.