Carbon tax: A solution to correct climate change

By Akshita Chembolu

There are two questions that a person who depends on the entirety of his livelihood on the use of carbon-based fuels must ask. One, how long do the oil reserves take to replenish themselves and second, what is the chemistry of the combustion of carbon-based fuels. The answers are simple and crucial to understanding why other countries must use British Columbia’s carbon tax law as a successful example to tackle the wrath of climate change. Oil takes millions of years to replenish itself and is used at a rate faster than the rate of replenishment. Secondly, fossil fuels are used based on the amount of carbon they emit on their combustion.

“A carbon tax,” according to the Carbon Tax Centre, and put rather simply, “is the fee imposed on the burning of carbon-based fuels (coal, oil, gas)”. Elon Musk said, “The reason we should do a carbon tax is that it is the right thing to do. It’s economics 101, the elementary stuff.” British Columbia is a province in Canada. The law has been effective since July 1, 2008, and British Columbia was the first North American jurisdiction to have such a law in place. The tax increased every year, and this greatest global challenges of our time: building an economy that will prosper in a carbon-constrained world.

At the same time, it’s been extraordinarily effective in tackling the root cause of carbon pollution: the burning of fossil fuels. Since the tax came in, fuel use in B.C. has dropped by 16 per cent; in the rest of Canada, it’s risen by 3 per cent (counting all fuels covered by the tax). To put that accomplishment in perspective, Canada’s Kyoto target was a 6-per cent reduction in 20 years. And the evidence points to the carbon tax as the major driver of these B.C. gains.”  The best part about the carbon tax implementation in British Columbia is a benefit to the environment without compromising on economic growth. Its GDP has outdone that of the rest of Canada’s.

The Rio summit of 1992 played a very important role in formulating many of the international environmental laws, considered textbook till today. An important concept that emerged in this summit was “polluter pays principle” and that is what the carbon tax in British Columbia focuses on.


The negative effects of climate change are wide-ranging. A sincere implementation of the carbon tax by countries across the world would be a leap from industries being ignorant and disposing of their wastes free of cost in an environment we must respect, to making smarter and wiser choices about how they wish to run their industries and manage the waste because of the industrial activity. It is a known fact that carbon-based fuels don’t replenish themselves soon, but their extinction can be postponed if we adopt efficient fuel choices because of the carbon tax.

One of the most recent theories on controlling climate change using the philosophy of a carbon tax comes from a report led by Professor Nicholas Stern, and these experts suggested a price of $100 for a tonne by 2030. If this was charged all over the world, the top price would raise $4 trillion. They said in the report, “”The revenue can be used to foster growth in an equitable way, by returning the revenue as household rebates, supporting poorer sections of the population, managing transitional changes, investing in low-carbon infrastructure, and fostering technological change.”

The effects of climate change are not alien to us. Ranging from melting glaciers and polar ice caps, droughts and famine like situations, desertification, ocean acidification to the extinction of certain species of the ecosystem, it doesn’t fail to impact every component of earth’s biodiversity and atmosphere. Air pollution, as claimed by reports of the World Health Organisation is responsible for approximately 4.6 million deaths. It is just about the time the idea of controlling climate change grew beyond discussions to actual large-scale, global implementation, and the carbon tax could be one of the ways in initiating it.

The carbon tax can’t be flawed much, and hence is a simple but powerful step to effectively start the journey of tackling climate change at a larger and more serious level. The carbon tax will only be one of the many policies that can be adapted to make a positive impact on the matters of climate change. As people of the 21st century, we have been witnesses to a lot of technological and industrial changes. The environment we live in now is far different from what we were given by our ancestors. It is our responsibility that we do not take climate change as a mere environmental phenomenon and take it for its severity and address it immediately.



Ross Beaty, Richard Lepsey, Stewart Elgie “The Shocking Truth about B.C’s Carbon Tax: It works”, The Globe and Mail (2014).

Johnston, “Climate change: $4 trillion carbon tax is needed to save humanity from global warming, say economists”, Independent (2017).

Akshita Chembolu is a Bachelors student at Jindal School of Government and Public Policy.

Featured Image Source: Foundation for Economic Education


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