What is the economic impact of a carbon tax?

What is the economic impact of a carbon tax?

A carbon tax aims to reduce carbon emissions by taxing fossil fuels. It can lead to higher energy prices but also encourages cleaner energy alternatives.

How does it affect consumers and businesses?

Consumers may face higher prices for goods and services, especially those reliant on fossil fuels. Businesses might invest in cleaner technologies to offset costs.

Are there any benefits to implementing a carbon tax?

Yes, it can reduce greenhouse gas emissions, promote innovation in renewable energy, and generate revenue for public projects.

What are some criticisms of a carbon tax?

Critics argue it can disproportionately affect low-income households and may not significantly reduce emissions if not set high enough.

How do different countries implement carbon taxes?

Countries vary in their approach; some have a fixed price per ton of carbon, while others use cap-and-trade systems to limit emissions.