About Carbon Taxes

A carbon tax usually refers to a tax on the carbon content of fuels, based on the assumption that burning fuel results in emission of carbon dioxide and other gases that cause climate change.

Carbon taxes don't mean more taxes or a more regressive tax system. Revenue derived from a carbon tax must be equitably returned to taxpayers if the tax is to be accepted by the public.

Compared with other policy alternatives, carbon taxes are simple and direct, providing a clear economic advantage to low-energy methods and low-carbon or carbon free energy sources. The carbon content of fuels can readily be assessed. Aside from tax variances that may be needed to compensate for applications where carbon is prevented from reaching the atmosphere (production of plastics, carbon sequestration), carbon taxes don't directly involve elaborate regulation or artificial market mechanisms.