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Global Carbon Tax

The document discusses the implementation of a global carbon tax as a means to reduce carbon emissions while generating revenue, highlighting India's potential role as a leader in this initiative. It emphasizes the need for a collective global effort to address climate change, particularly focusing on the historical injustices faced by the global South. The text outlines India's commitments to reducing emissions and suggests a market-oriented approach to carbon taxation and international trade to foster climate action.

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Kygo Dahll
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47 views2 pages

Global Carbon Tax

The document discusses the implementation of a global carbon tax as a means to reduce carbon emissions while generating revenue, highlighting India's potential role as a leader in this initiative. It emphasizes the need for a collective global effort to address climate change, particularly focusing on the historical injustices faced by the global South. The text outlines India's commitments to reducing emissions and suggests a market-oriented approach to carbon taxation and international trade to foster climate action.

Uploaded by

Kygo Dahll
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Insights Mindmap

General Studies-3; Topic: Conservation, environmental pollution and degradation

Global Carbon Tax


Introduction
• One way to cut effluents while earning revenues is to price the carbon content of domestic production
and imports.
• India can be among the first movers in the developing world in taxing and switching from carbon-
intensive fuels.

Emission trading and Carbon Tax


• One way to price carbon is through emission trading, i.e., setting a maximum amount of allowable
effluents from industries, and permitting those with low emissions to sell their extra space.
• Pilot projects on carbon trading in China have shown success.
• Another way is to put a carbon tax on economic activities — for example, on the use of fossil fuels like
coal, as done in Canada and Sweden.
• Canada imposed a carbon tax at $20 per tonne of CO2 emissions in 2019, eventually rising to $50 per
tonne.
• A carbon tax at $35 per tonne of CO2 emissions in India is estimated to be capable of generating some
2% of GDP through 2030.
• International Monetary Fund endorsed the European Union’s plan to impose carbon levies on imports.
• India should also use the power of a large buyer in international trade, to impose a carbon tariff as
envisaged by the EU.
• Focusing on trade is vital because reducing the domestic carbon content of production alone would not
avert the harm if imports remain carbon-intensive.
• Therefore, leading emitters should use their monopsony, diplomacy and financial capabilities to forge a
climate coalition with partners.
• A carbon tax is less likely to face political opposition while creating avenues for businesses and growth.
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Insights Mindmap

Sharing the burden by the global south


• The global South, which has historically contributed less to the problem happens to be at the receiving
end of the lifestyle choices made by the global North.
• Even at present, global south per capita carbon emissions are much smaller in comparison to the
countries in the global North.
• A genuine global consensus on the mitigation of this problem is unfortunately missing.
• In the absence of a collective agreement, the environment is becoming the casualty.

Correcting injustice
• The first priority is to fundamentally change the energy infrastructure, which requires massive
investments.
• The countries at the top, apart from funding their own energy transition, must partially support the
transition for the countries at the bottom.
• The global energy transition can be financed through a system of the global carbon tax.

India’s Action
• India has committed to 40% of electricity capacity being from non-fossil fuels by 2030, and lowering the
ratio of emissions to GDP by one-third from 2005 levels.
• It is in the country’s interest to take stronger action before 2030, leading to no net carbon increase by
2050.
• India is among the nations that are hardest hit by climate impacts.
• There is growing public support for climate action, but we need solutions that are seen to be in India’s
interest.

Way Forward
• Climate change is a global problem, and a global problem needs a global solution.
• All nations must climb down the emissions ladder without giving up on their standard of living.
• Both the worlds (global north and global south) need to contribute to avert this danger in their self-
interest.
• The burden of adjustment cannot be equal when the relationship between the two worlds has been
historically unequal (climate injustice funnel).
• A just approach would involve a global sharing of the responsibility among countries according to their
respective shares in global emissions.
• For India, market-oriented approach to tax and trade carbon domestically and to induce similar action
by others through international trade and diplomacy offers a way forward.

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