Categories: General Tax Terms
Carbon Tax
A Carbon Tax is a tax levied on the carbon content of fuels, aimed at reducing greenhouse gas emissions. It is designed to encourage businesses and individuals to decrease their carbon footprint by making fossil fuels more expensive compared to renewable energy sources.
For example, a government may impose a tax of $25 per ton of carbon emissions, which would increase the cost of coal, oil, and gas, thereby incentivizing the use of cleaner energy alternatives. The revenue generated from a carbon tax can be utilized for environmental projects, renewable energy development, or may be returned to taxpayers through rebates.
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