Last week Austria announced its new carbon tax at €30 per ton. So who already taxes Carbon worldwide and how does it work?
There are two ways to differentiate carbon taxes: a Cap & Trade system— that is quite commonplace nowadays— or a direct carbon price taxed per ton.
Cap & Trade: Emissions Trading System
China, EU, USA, New Zealand, Mexico, Japan, South Africa, UK all have it in place.
Basically, how it works in the EU is that the EU Commission sets a cap on the tons of CO2 that can be emitted. If companies emit more, they need to buy through the ETS carbon allowances. Check how this works by watching this quick easy video.
Some countries have both: Switzerland, Sweden, the UK, France, Finland, and now Austria.
however, the price per ton drastically differs. In Sweden it’s €116.33 per ton, in Poland it’s €0.07 per ton.
So what will it take for the bigger polluters to pass a carbon tax? We need the USA & China to adopt a carbon tax asap.
Austria’s carbon tax
Austria’s carbon tax is pegged to the German tax at €30 per ton of CO2, rising by €60 by 2025. According to climate-economic perspectives this price is too low.
Transport is the most polluting industry in Austria, which is why the government has also introduced a Klimaticket (a climate ticket). A heavily subsidized yearly ticket whereby every Austrian can take all means of public transport with one pass.