October 15, 2019

Opinion | What a carbon tax can and can’t achieve against climate change

In this article for Mint, Niranjan Rajadhyaksha discusses the merits and demerits of a global carbon tax. He also looks at the fairness of having developing economies like India adopt the same. Excerpts below:


"Economists have often debated whether the best way to reduce carbon use is via higher prices or through quantity restrictions. The consensus now is that a carbon tax is the better policy response.


On the problems associated with a global carbon tax:


"A homogenous global carbon tax will, in effect, impose costs on developing countries rather than those that have been responsible for most of the existing stock of pollution. Second, taxes are part of national social contracts that emerge out of very specific conditions that cannot necessarily be replicated on a global scale.”


On the fairness of having India adopt the same: 


"India should be part of the global alliance to fight the problem, but it also needs to reiterate that it is not responsible for what has been pumped into the atmosphere over the past three centuries, that its average citizen consumes too little energy, and that the developed world needs to help finance its transition to cleaner energy."


Read the full article here

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