The theory behind Carbon Taxation is this : according to the “Principle of the Polluter Pays”, one of the guiding principles established by the global community in the early 1990s, environmental bads should be charged.
In other words, if you mess up, you should pay for it. And that includes Carbon Dioxide Emissions.
The trouble that arises is the cost “double whammy”.
If an organisation or a company, or even an individual, is being charged for their Carbon Dioxide Emissions, then they’re going to be financially stretched to pay for the investment they need to make to reduce their Carbon Dioxide Emissions.
You can hardly expect a corporate body to be willing to say to their auditors “Well, we had to pay for our Carbon Tax this year, and we also had to pay to reduce our Carbon Dioxide Emissions, so that we are not liable for so much Carbon Tax next year.”
The accountants won’t like that one single bit. No. If taxing Carbon Emissions is the right way to go, then there needs to be a slow ramp up to allow people to adjust.
We say that, say, by the year 2015, emissions will be the largest they will ever be : after 2015 they will be falling, and that’s for everyone, regardless.
If accountants look at the timeframe of 2015, they have a bit of time to react by apportioning a budget, getting the management to make concrete plans, informing and training the workforce, changing equipment and machinery.
Come 2015, emissions will have peaked and start to decline.
Then what’s the point of a Carbon Tax then ?
If you regulate emissions away, there’s no need to tax people for them.
And as for the “Polluter Pays” principle : corporates and organisations will just pass the costs on to their consumers and citizens. The poor will get poorer. As usual.