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Carbon Tax and its Role

The importance of Tax reforms to government fiscal policy cannot be understated, especially given the unfavourable economic climate faced by the global community.

One particular area of taxation that requires attention is carbon taxation, and its role in mitigating the impact of
greenhouse gases and carbon emissions on our natural environment.  It is a trite fact that carbon emissions emanating from human activity contribute significantly to the rising global temperatures. Formulating a fiscally sound carbon tax could prove invaluable in making inroads geared at addressing the on-going problem that is global warming. Governments have the duty to educate taxpayers on the rationale behind carbon taxation, more especially bringing it to the public’s attention that a carbon tax is not a “trustfund” set up to deal with environmental damage, but that it is a mechanism used to promote the use of alternative energy in the different sectors. Thus it must not be viewed as a licence to destroy the economy if you can afford it, but it must rather act as nudge in the direction of alternative energy.

One of the ways that a government is able to demonstrate the philosophy behind carbon tax is by breaking down the price of goods so as to expose the amount of carbon tax and thereby the carbon footprint of that particular good. Such that if you buy a car, there will be different carbon tax on a hybrid car, diesel car, and petrol car. Each amount
indicative of the amount of carbon emissions released by each car.

Carbon tax is not only feasible, but necessary if we are going to put up a fight against global warming. It is by no means the only way to address the scourge of global warming, however, it is one way in which sustainable change can be effected.

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