The European Union is proposing a Carbon Tax to tackle Climate change - So what does it mean?

The European union has announced that the EU's ambitious target of reducing carbon emissions by 55% compared to 1990 levels, by the end of 2030. 

To tackle climate change it includes a proposal that if adopted could be the 1st of its kind. it is a Carbon Tax or Carbon tariff on imports from countries that aren't taking similar aggressive steps to reduce their own planet warming green-house gas emissions.

Its climate change proposals aimed at pushing it towards its goal of becoming carbon neutral by 2050.

What is Carbon Tax or Carbon tariff?

Ans:- Under Carbon Tax, The government set a Fixed price or rate:- that is paid by businesses and industries for carbon emissions.

➧ When carbon rich fuels are burned, they produce Greenhouse gases, And these gases like- Carbon-dioxide, Methane, etc. create Global warming by heating the atmosphere :- resulting Heat waves, flooding, etc.

➧ The purpose of a carbon tax is to reflect the true cost of burning carbon and this cost on carbon helps shift the burden for the damage back to those who are responsible for it. 

These are the countries that emitted the most carbon dioxide in the world:-

➧ Taxes on greenhouse gases are :- 

(a) An Emission tax:- which is based on the quantity an entity or businesses produces. and,

(b) A tax on goods or services that are generally greenhouse gas-intensive such as a carbon tax.

➧ Carbon taxes have been implemented in a number of countries around the world for example:-

• The first country to implement a carbon tax was Finland, in 1990.currently they levy a rate of $73.02per ton of carbon.

• The Sweden and Norway both implemented their own carbon taxes in the year 1991, at a rate of $69.00per ton of carbon used in gasoline.

• The Great Britain imposed a tax of $25per metric ton of carbon.

• In 2019 Canada imposed a national carbon tax of $16per ton of carbon and this will increase to $39 a ton by 2022.

• In India The government in last budget doubled the Clean cess on coal and raised excise duty on petroleum products several times translating into a carbon tax of nearly $60per ton of carbon in the case of petrol and nearly $42per ton in the case of diesel.

• In China $40per metric ton of carbon, etc.

➧ A carbon tax can raise significant revenue but, How that revenue is used will ultimately be a political choice.

Focusing on trade is vital, because reducing carbon content of production alone would not alert the harm- if import remain carbon intensive. There for The European Commission's proposed "carbon border adjustment mechanism".

💥Right now most industries and businesses in the European Union are covered by a program that charge carbon polluters for the carbon dioxide they emits. This program is known as the Emission Treading System.

▘Under the Emission Trading System:-  

→The European Union is proposing to slash the EU's overall green-house gas emission 55% below 1990s level by 2030.

→Many European industries may have to make drastic and costly changes. Steel producers like Tata steel Europe, ArcelorMittal, etc. are experimenting another way to use hydrogen instead fossil fuels, but they warn that such upgradation could cost tens of billions of dollars.

 ▘Under Carbon Border Tax:-

→The companies abroad that wanted to sell Iron, Steel, Aluminum, Cement, Fertilizer or Electricity to the European Union would also require to pay the price for each ton of carbon dioxide they emit in making their products. The idea would be to make level playing field.

The European Union is serious about trying to decarbonize their industrial sector and industrial sector with rest of the world.

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