“More than 20 countries around the world have already introduced a carbon tax”

Photo by: Simon van Hemert / iStock

A carbon tax has long been introduced in many countries around the world. For example, Finland introduced it in 1990 and Sweden in 1991. In total, there are more than 20 countries in the world with such a tax. The tax rate varies from $1 per ton of CO2 in Ukraine and Poland to $130 in Sweden.

The mechanism of the carbon tax varies in different countries, but not substantially. Throughout the world, it applies to liquid fuels, natural gas and coal. Depending on the amount of greenhouse gases emitted from their combustion, the tax rate per tonne of fuel is set. Normally, the tax payment does not exceed 1% of the gross revenue of a company, so as not to create excessive tax pressure on business. This approach, on the one hand, provides an incentive for companies to reduce their emissions and, on the other hand, avoids bankruptcy.

Cover photo: Kloeg008 / iStock