Carbon Tax for Sustainability-An Indian Perspective

Global warming has created havoc among the nations. Melting of artic at an alarming speed, rising sea level, shrinking of cryosphere and death of polar bears are serious indications of global climatic change. Millions of questions are raised on the sustainability of ozone, which saves the Earth from the greenhouse effect. It is now high time for all of us to think of alternatives to mitigate the global warming. Climate change impact can be avoided, reduced or delayed if an effective global climate change mitigation policy is agreed upon and implemented. Basically, there are two approaches to reduce the greenhouse gas emission, i.e. the command and control approach and incentive-based approach (i.e. cap-and-trade programme and carbon tax programme).

This paper emphasises on carbon tax programme for mitigating CO₂ and other gaseous emissions, such as methane, nitrous oxide, hydrofluorocarbons, etc. It also considers carbon tax as the best approach over other approaches to combat global warming. This paper highlights the scope of implementation of carbon tax in the Indian sub-continent. This paper computes reduction of emissions for different scenarios based on the projected consumption pattern with the assumed changes in carbon tax and the present tax rate. The proportion of reduction from the current tax scenario has been computed to provide an impression of the relative change with the change in taxation.