“Carbon tax should be spent on solving environmental problems”

Photo: iStock

Before a carbon tax is introduced, states usually reduce taxes on profits or wages. As a result, the tax burden on business is not increased. In this way, positive activity is stimulated by the ability to increase profits. In countries where fiscal-neutral reform has been implemented (Finland, Sweden), the tax burden on business has not increased.

In addition, how carbon tax deductions are used is important. In many countries, these levies are spent on incentives to reduce the carbon intensity of the economy, renewable energy, energy efficiency, and reforestation.

Cover photo: vinzo / iStock