CARBON TAX: THE ECONOMIC TOOL TO PROMOTE EMISSION REDUCTION

admin
March 26, 2024

Carbon tax, or carbon taxation, is an environmental tax levied on the carbon content of fuels. It serves as a form of pricing carbon. Carbon atoms are present in all fossil fuels (coal, oil, natural gas), and they release CO2 (carbon dioxide) gas when burned.

• Carbon tax is the environmental tax employed in many countries worldwide with the aim of pricing emissions, and restraining excessive exploitation, use, and consumption of energy by limiting and minimizing the profitability of such activities.

• Carbon tax significantly reduces greenhouse gas emissions. Furthermore, a carbon tax can generate substantial budgetary revenue for countries if applied over an extended period. Utilizing the revenue from the carbon tax to support and encourage businesses to use clean energy or implement climate adaptation measures is also a viable option.

• In Vietnam, tax policies have changed to address climate change through special consumption taxes, environmental protection taxes, and various environmental fees for mineral exploitation. Additionally, Vietnam is currently developing and implementing plans to deploy an emissions trading system and researching the potential of other carbon pricing tools to fulfill the country’s climate commitments.

• Carbon tax can affect businesses and consumers by raising the cost of products and services. However, by transitioning to clean energy use and optimizing energy efficiency, businesses can reduce the adverse impacts of the carbon tax.

• Carbon tax is becoming an important tool in climate change control and environmental protection. Its objective is to reduce greenhouse gas emissions and CO2 released into the environment, while encouraging the transition to clean energy sources. In the future, promoting international cooperation and establishing effective carbon tax-related policies will play a crucial role in mitigating global climate change.

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