New law for carbon tax
It is reported that the government is planning to revise the existing taxation law to levy a new tax on carbon emission and pollution of the environment. This was disclosed by the state minister for environment and forests at a workshop organised by UNDP in Dhaka recently.
The concept of carbon of tax is completely new in Bangladesh and, as such, it would have been better if the state minister had explained what carbon tax is, what its advantages and disadvantages are and why it is so important to impose the tax now.
Carbon dioxide is one of the major components of greenhouse gases believed to be responsible for global warming and climate change. The idea of carbon tax originated to limit the release of carbon dioxide into the the atmosphere, through the combustion of fossil fuels like coal, oil and natural gas, in order to mitigate the effects global warming and climate change. The carbon tax may be levied on the production, import, distribution or use of fossil fuels depending on the amounts of carbon dioxide produced by such fuels.
With carbon taxes, the costs of carbon emitting fossil fuels will increase compared to the non-carbon-emitting energy sources like renewable energy and nuclear power. Carbon tax is expected to reduce carbon emission into the atmosphere through the reduction of the carbon emitting fuels and encourage the use of environment friendly renewable energy sources and nuclear power.
-Since about 1750, the concentrations of carbon dioxide and some other greenhouse gases have been increasing steadily. The present atmospheric concentration of carbon dioxide is about 391 ppm by volume. Different scenarios project carbon dioxide concentration to increase to a range of 541-970 ppm by the year 2100. It is generally agreed that:
-The developed countries are mainly responsible for the largest share of past and current global emissions of greenhouse gases;
-Per capita emissions in developing countries are still relatively low;
-The share of global emissions originating in developing countries will grow to meet their social and economic development.
The carbon dioxide emission by selected countries is shown in Table-1.
It may be noted that Bangladesh has one of the lowest emission rates of carbon dioxide in the world, both in terms of total and per capita quantities, whereas the major polluters are China, US, Russia, India, Japan and other developed countries. Since carbon dioxide emission and global warming are now global issues, the decision to impose carbon taxes in Bangladesh must be taken in a global perspective.
Major polluters like China, US, Japan, UK and Russia are yet to impose any uniform carbon tax. Some states in US and some provinces in Canada have levied carbon taxes. Denmark, Finland, Italy, the Netherlands, Norway, Sweden, the UK and others have imposed energy taxes based partly on carbon content. France may even drop plans to introduce carbon tax. Many industries in Japan are opposing the introduction of carbon tax. Among the emerging countries, India and South Africa are known to have imposed carbon taxes very recently.
This being the situation globally, what is the urgency of imposing carbon tax in Bangladesh? With its present total emission rate of carbon dioxide ( 0.2% of global total), it is very unlikely that Bangladesh will make any dent in the trend of global warming by either increasing or decreasing its emission.
On the other hand, carbon tax will only increase the cost of all fossil fuels and electricity. Higher fuel and electricity costs will have a detrimental effect on our economic growth. At this stage, we need an abundant supply of cheap energy and electricity to sustain our economic growth.
While the major polluters, i.e. the industrialised countries, are still debating the issue of imposing a uniform carbon tax, it is not clear why Bangladesh is so keen to introduce carbon tax knowing fully well that our effort will have negligible effect in mitigating climate change and, on the other hand, will only retard our economic growth due to higher energy costs.
A decision on this matter should be taken after full consideration of the advantages and disadvantages of imposing the carbon tax and only in the national interest, no matter what the UNDP or other international organisations may prescribe.
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