Sunday 10 September 2023

No 268: A Global Carbon Tax?

FOR years, many environmenal economists (including me!) have argued that the best policy to reduce fossil fuel emissions is a carbon tax.

This kind of tax would be charged both to businesses and consumers according to how much CO2 was emitted by the different activities they engage in. Although everyone hates taxes, they are a very useful way to stop people doing something. And if they do not stop doing it, it nonetheless provides revenue to be used to clean up any problems they are causing.

Cigarette smoking, plastic bag use, consumption of fizzy drinks, are all areas in which this seems to have worked.

This week, leaders at the African Climate Summit have called for a global tax on carbon emissions. Why this is different from individual countries doing it themselves is that it may help with "climate change inequality" - whereby the poorest countries in the world face the biggest costs from climate change, have the least money to deal with it, yet have done the least in terms of emissions to have actually caused it.

Under the proposal, the proceeds of a global carbon tax would go to these countries. Do you think it is an idea that can work? Read about it here: https://www.bbc.com/news/world-africa-66733557

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