The way I see it, the major barrier to countries implementing carbon taxes is the fear their economic competitors won’t do the same, therefore hindering their economic growth needlessly. A valid concern.
Why don’t some nations build an ‘opt in’ style Free Trade Agreement that allows any country to join as long as they prove they have implemented and enforced a carbon tax. Those countries then have high financial incentives to only trade within the ‘carbon tax block’ and any country outside is at a serious trade disadvantage.
I’ve (quickly) looked and have not found anything like this proposed (which is frankly crazy).
Would you support your country jumping into this FTA?
What are the unforeseen downsides or objections to a plan like this?
That would depend on where the money from that tax goes, how it’s enforced, and how that organization is set up to reduce corruption.
I’m all for it on paper, but I’m not expecting something like this to actually happen and work in the real world.
All valid points. Compliance would have to be a staple, which makes enforcement and oversight critical.
Where would you want the tax revenue to go in your country?
Personally, I’d be happy with a blanket tax return. Take the money generated by last year’s carbon tax, divide it by the number of tax payers, and call it a day. Since wealthy people typically have a higher carbon impact (pay more into the tax), this would average out to a small redistribution of wealth towards the less fortunate.