Environmental tax law is one of the many factors that impact our quality of life, both as a society and as individuals. All types of tax schemes such as income tax, business tax, property tax, estate tax, and local tax can potentially include some type of environmental tax. This basically means that any type of “duty” on the use of a natural resource may be imposed as an obligation to the environment.
revenue recycling for their tax schemes
This has become a very important topic over the past decade, as many different countries and jurisdictions have implemented some form of revenue recycling for their tax schemes. The United States Federal Government along with state and local governments in the US is currently considering a strong form of environmental tax where a portion of all gasoline sales would be placed into a fund that could be used for reducing air pollution. Another strong form of this concept is called the double dividend hypothesis. Here’s a quick overview:
climate change increasing concentrations of carbon dioxide and greenhouse gases
Global warming or climate change is the result of increasing concentrations of carbon dioxide and other greenhouse gases in the atmosphere. Increasing concentrations of carbon dioxide and other greenhouse gases in the atmosphere lead to a rise in global temperatures, which in turn, lead to a rise in the associated sea level, extreme weather events, and more. Each of these problems poses a significant risk to human health, as well as to human structures and infrastructure. It is not difficult to see how climate change has made itself apparent and is quickly becoming a major problem. In fact, the threat posed by climate change is so severe that the United States has created an environmental protection agency to help protect the environment.
Carbon taxes are a type of fee on carbon dioxide emissions
To try and combat some of these problems, carbon taxes were implemented in several nations around the world. Carbon taxes are a type of fee on carbon dioxide emissions, in hopes of reducing the amount of carbon dioxide emissions into the atmosphere. These fees are generally based on the emission rate for a particular fuel; gasoline, coal, oil, etc… A carbon tax also may be linked to other types of taxes, such as a tax on land (or other carbon-based fuels) or a tax on the production of carbon dioxide or other greenhouse gases. Many experts agree that the best way to deal with these problems is to implement a comprehensive carbon tax system across the country.
providing funding for research and other environmental programs
Although the implementation of such taxation can raise many questions about the validity of environmental goals, there is no doubt that the increased revenues that result from these taxes support important environmental goals. The increased revenues generated from carbon fees and other taxes help to improve the efficiency of processes that would otherwise be inefficient without them, while also providing funding for research and other environmental programs. As stated previously, the legitimacy of these taxes is still being debated.
the efficiency element of the tax does have significant economic benefits
There is a possible exception to this. If a tax is passed that increases the efficiency of a business process – such as the improved treatment of defective products or the development of new, cleaner energy sources – the revenue generated by the increased efficiency may not be required to support the cost of the program. That said, it should be noted that the efficiency element of the tax does have significant economic benefits. For instance, if the tax is implemented in a way that allows companies to invest the money saved through the increased efficiency, then that “savings” could be used to mitigate some of the costs associated with greenhouse gas emissions. This is part of the reason that many economists support the implementation of a carbon fee.