12 THE CAAR COMMUNICATOR Sometimes, people and governments toss out new words or phrases and expect everyone to quietly follow along. Such is the case with carbon taxes. Most of us have a peripheral understanding of the concept. But, when we go looking for more, we are met with a wall of words written by academics—complex in verbiage, but not easily understood. So, let’s start at the beginning and decode some of the academic source material we see. What is a carbon tax? If a company produces a product and creates carbon emissions while doing so, that company is asked to pay a carbon tax. Carbon taxes are placed on carbon-based fuels and industries that produce carbon emissions. Why? Why do you have to pay a carbon tax? Because carbon emissions are considered bad for one’s health and the global environment, countries are being asked to reduce the amount of carbon emissions produced to lessen the danger to the world as a whole. The idea behind the tax is to penalize those who produce carbon emissions by making it more expensive for them to produce their products. At the same time, carbon taxes are subtly meant to encourage the use of products or methods that produce either fewer carbon emissions or zero emissions. It’s a methodology to save the producer money. The carbon tax is unlike other types of taxes. For example, a standard tax placed on a book purchased at a bookstore goes back to the government, where that tax money can be used as a payment for a government social program, government medical offerings, or to pay for the upkeep of roads, et al. Carbon tax revenues, however, are being used to combat carbon emissions. What happens to the money that is paid into the carbon tax? If we peruse the Internet, we get a lot of answers to a lot of questions, but presenting a cut-and-dry answer to this question takes some diving into things. No matter what province you are in, if you pay a carbon tax, that money is used only in the province from which it was obtained. For example, Alberta payers of the carbon tax can rest assured that their money will only be used in their province. This holds even though the carbon tax is a federal tax initiative. Clearing the air on carbon tax A guide to how the carbon tax system works in Canada. By Andrew Joseph, Editor CARBON TAX Measuring the cost of switching to a greener alternative, some sectors and companies can cheat the system by purchasing carbon credits from responsible producers. OleCNX - stock.adobe.com
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