1 thought on “Carbon taxes: trickier than you think”

  1. Posted 10/10/2020 at 10:26 | Permalink

    Len,

    Hi, I agree a carbon tax won’t be easy, but it is better than all the alternatives. Although many would say climate change is the biggest challenge facing mankind the inefficient way we have addressed it suggests we aren’t serious. The IMF last year showed an example of the price pre tonne CO2e saved varying from a few quid to hundreds. If you ran a business buying any other product like that you would go bankrupt.

    The externalities of GHG emissions are almost impossible to calculate, the UK might be much less negatively affected than others, it may even benefit. But if we take the net zero commitment for 2050 as given and the five year budgets as the way it is monitored, that might allow government to work out an appropriate value to drive the actions required to meet it in the most effective way.

    Inevitably , there must be excitement in Treasury at a seemingly just way to raise more revenue, and the risk of getting hooked on it, that seems inevitable with any tax. On its implementation, there will definitely need to be exemptions, but it might be a good prompt for international negotiation at CoP26. Could it be slowly incorporated by making other taxes align with it when they updated?

    Yours,
    Barny

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