Carbon Tax for Sustainability-An Indian Perspective

Global warming has created havoc among the nations. Melting of Arctic 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 being raised on the sustainability of ozone which saves the earth from greenhouse effect. It is high time for all of us to think of alternatives to mitigate 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 Greenhouse Gas (GHG) emissions: command and control approach and incentivebased approach (i.e., cap-and-trade program and carbon tax program). This paper emphasizes on carbon tax program for mitigating CO2 and other gaseous emissions. It also considers carbon tax as the best approach over other approaches to combat global warming. The paper also highlights the scope for implementation of carbon tax in the Indian subcontinent and 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.