With lawmakers around the world thinking more and more about the dangerous gasses causing global warming, acid rain and other destructive environmental problems, some have suggested a tax on carbon, or on greenhouse gas emissions in general. Some of the goals of a carbon tax are to reduce consumption of fossil fuels and to make the cost of them more comparable to forms of alternative energy, like solar power or geothermal power.
Carbon taxes have already been implemented in a variety of forms in some parts of the world. For example, several Northern European countries have accepted various forms of carbon tax. One such country is Sweden, which taxes consumers and industry but not utilities. The carbon tax in Quebec is aimed at energy and oil companies, who, in turn, are sure to pass the cost on to consumers [source: CBC]. The United States has also given carbon tax a go in the form of a municipality tax in Boulder, Colo. [source: Kelley]. Consumers and businesses are taxed according to the amount of kilowatts they use, and they are allowed offsetting discounts for using alternative energy.
So how do economists and politicians feel about carbon tax? Are they in agreement on the subject? Economists are generally supporters of carbon tax. They feel that once carbon taxes are levied, and in turn raise the cost of fossil fuel consumption, they will act as an incentive to reduce dependence on fossil fuels. Politicians, on the other hand, are concerned with potentially angry voters. They feel that carbon taxes would inflate energy costs to levels unbearable for consumers. Even so, some politicians understand the need to rein in their nation's dependency on fossil fuels.
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