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What Is A Carbon Tax?

By Kristin Hunt

Lately, everyone’s talking about carbon taxes. On July 23, Representative Carlos Curbelo introduced a bill that would levy a tax of $24 per metric ton of carbon dioxide equivalent emissions in 2020, with the rate scaling up each year after that. It arrived right as a carbon tax proposal from the Climate Leadership Council was recirculating with new PAC support. While neither has passed or been adopted yet, these measures indicate bipartisan support for a carbon tax, since both Democrats and Republicans sit on the Climate Leadership Council. (Curbelo is a Republican.)

The chatter isn’t confined to America, either. Canada is currently finalizing numbers on the carbon tax plan for its 10 provinces, while nations ranging from The UK to Chile already collect fees on carbon emissions. 

Carbon taxes are increasingly becoming international policy, but how exactly do they function in practice? Let’s break down the basics.