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Carbon Tax

A Carbon Tax is an environmental tax imposed on the carbon content of fossil fuels, aimed at reducing carbon dioxide (CO₂) emissions. This economic policy leverages price signals to incentivize businesses and individuals to lower their carbon footprint. By assigning a financial cost to each ton of greenhouse gas emissions, a Carbon Tax encourages the adoption of cleaner energy sources and the implementation of energy-efficient practices.

The primary objective of a Carbon Tax is to mitigate climate change by curbing unsustainable consumption patterns and fostering innovation in renewable energy technologies. Governments around the world are increasingly considering this tax as part of their broader environmental strategies to meet international climate commitments, such as the Paris Agreement.

Revenue generated from Carbon Taxes can be reinvested into green projects, used to subsidize renewable energy, or returned to citizens through rebates. This not only supports the transition to a low-carbon economy but also helps to address potential social equity concerns by offsetting any regressive impacts on lower-income households.