Explain how each of the following works: a green tax, a subsidy, and an emissions trading system.
Explain how each of the following works: a green tax, a subsidy, and an emissions trading system.
Answer: The world is experiencing a growing number of serious environmental issues, including air pollution and climate change, as a result of ongoing increases in manufacturing size and carbon emissions. On the one hand, the report "Global Air Condition 2019" published by the American Institute of Health Effects noted that air pollution ranked sixth among all health risk factors in the world. On the other hand, the Intergovernmental Panel on Climate Change (IPCC) argued that global warming needed to be kept to 1.5 degrees Celsius or the planet would experience catastrophic climate change by 2030. If air pollution and climate change were left unchecked, there would be a greater chance of severe, widespread, and irreversible risk on humans and ecosystems. Therefore, it is critical to cut carbon emissions.
A. Green taxes:
A carbon tax is thought to be an efficient market-based strategy for reducing carbon emissions. Pigovian is the first to introduce the idea of an environmental tax, according to which the government can reduce the harmful externalities of pollution by levying taxes like a carbon tax.
It is also referred to as "environmental taxes," "pollution taxes," or "eco taxes," are excise taxes imposed on goods that are used to produce environmental pollutants. The objectives of "green taxes" are to enhance the environment, lessen adverse environmental effects, or foster an environment that is environmentally sustainable. "Green taxes" are a particular type of economic tool to address environmental issues. By promoting behavioural changes by businesses, organisations, communities, households, and individuals, "green taxes" are generally thought to reduce environmental harm in the most affordable way. Polluters are clearly motivated by taxes on pollution to cut emissions and look for greener, more sustainable alternatives.
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