The basic idea of a carbon tax is that it will improve the economic competitiveness of low-carbon-intensity products (e.g. wind power) compared to high-carbon-intensity products (e.g. fossil fuel power).Bat Pad wrote:So why will there be a reduction in CO2 output?
Both consumers and producers will try to avoid paying some of the tax by avoiding or reducing their usage of higher-carbon-intensity products and services.
The tax also raises revenue - some of which will likely go towards research and development of low-carbon-intensity technologies.