What is Carbon Tax levied upon petroleum products?

Why is it levied upon petroleum products? What and how does government pay back to its citizens?

One Response to “What is Carbon Tax levied upon petroleum products?”

  1. simplicitus Says:

    No one in his right mind talks about carbon taxes levied only on petroleum products:

    1. Per unit energy, coal generates much more carbon dioxide than do petroleum products, so burning less coal is more important, from an environmental perspective, than burning less oil. So, at very least, coal would be taxed as well (and at higher rate)

    2. A more common model for a carbon tax is to tax not the producer of the fuel, but the generator of the carbon dioxide – the unit that burns the coal or oil, etc.

    3. The goal is to discourage the use of fossil fuels by making their use more expensive. The hope is that at very least it should encourage more efficient use of such fuels and in the long run the conversion to alternative energy sources.

    4. The general model is that revenue taken in through a carbon tax will mostly be balanced by cuts in other taxes.
    Of course, once politicians see another source of revenue, they want to keep it, so in the end it may not be quite as revenue-neutral a tax measure as people have been advocating.

    The alternative to a carbon tax is a cap-and-trade system for permissions to generate given amounts of CO2.