Guide Note
The carbon tax is a proposed tax on carbon dioxide emission, a pollutant that contributes to global warming. Carbon taxes would indirectly tax fossil fuels and other energy sources which emit carbon dioxide.
Fast Facts
- Proposed by Bill Clinton and Al Gore
- Is an indirect tax
- Classified as a Pigovian tax
- Fossil fuels include: Coal, natural gas, oil
- Taxes a negative (carbon dioxide emission) rather than a positive (income)
- The Carbon Tax Center proposes carbon taxes to be revenue-neutral and phased in for easy adapting
Why Carbon Dioxide
Increasing levels of carbon dioxide cause energy from the sun that would normally be reflected back into space to remain in the Earth's atmosphere. This can contribute to the gradual increase in the planet's temperature that is known as global warming. Because of the widespread burning of fuels that emit carbon dioxide, the carbon tax has been proposed as a possible solution.
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