By definition, a carbon tax is a type of tax, the level of which depends on how much carbon a company or corporation releases. The aim of these taxes are to significantly decrease the carbon dioxide in the atmosphere and with that, greenhouse gasses are also decreased in the atmosphere.
The impact that these taxes have on the reduction of carbon dioxide and the levels of this reached, according to the research that has been done, has shown them to be cost-effective and worthwhile.These taxes are not like the taxes we all know and pay. Carbon taxes are paid for two main reasons - to pay for intentionally polluting the environment, or to reinvest with reforestation or financial contributions. You are paying for the pollution that your business produces.
Therefore, there are forms of pollution taxes or alternative economic policy tools. One is tradable pollution, the second is credits and the third one is subsiding.
How is carbon dioxide produced, and what forms of chemical reactions cause carbon dioxide to be released into the atmosphere? When fuels made up of hydrocarbons, for example, coal, petroleum, and natural gases, are burnt in many different processes of production across various industries, the hydrocarbon converts to another form, known as carbon dioxide. This gas is harmful because it is one of several 'greenhouse gases' which cause serious health and environmental issues.
Fossil fuels are partly made of carbon, so, when they are burned or are under thermal transformation, they release a certain amount of carbon dioxide in the air. The amount released in the air is proportional to the amount they have in their natural composition. This has numerous negative side effects and therefore, something needs to be done, to compensate for the harm done. This is where the role of carbon taxes come into play. Carbon taxes are calculated according to the quantity of carbon that is released from each of the various types of fossil fuels. Different fossil fuels have different carbon taxes, as they include carbon in different quantities.
To some companies, it might be easy to buy carbon offsets, but to others, whose factories use fossil fuels that include high taxes, it might not be the best solution to buy large amounts of carbon offsets to pay off the taxes. Moreover, this step won’t solve the problem as money, if not invested wisely, can’t decrease the amount of carbon in the air.
Here are some of the most important things to know if you plan on planting trees instead of paying the required tax:
We encourage everyone to continually strive to eliminate their carbon footprint through a combination of sensible energy reductions and cost-effective carbon offsets. DutchGreen supports third-party validated and verified tree planting projects globally that reduce carbon dioxide emissions.