Volume No. 3 Issue No.: 4 Page No.: 1048-1055 April-June 2009

 

CARBON TAXATION IN INDIA : AN EFFECTIVE MARKET-BASED APPROACH FOR REDUCING CARBON DIOXIDE EMISSIONS

 

Bharti Lamba* and Vatsal Gaur

M.T. Halls, National Law University, Jodhpur

 

Received on : February 25, 2009

 

ABSTRACT

 

The need for domestic Indian legal policy that addresses the perils of climate change is increasingly apparent, in the light of the national environmental policy which aims at sustainable usage of natural resources and pollution prevention along with development. In the Indian environmental setting, one way to do this is to place a price on the negative externality like pollution through Carbon tax on the production, distribution or use of fossil fuels and other non renewable resources based on the carbon content of the fuel. The paper proposes levying of Carbon tax as a preferred market-based mechanism to counter the challenge of Global climate change, as compared to the cap-and-trade approach on various parameters such as overall cost effectiveness and predictable long-term prices to name a few. The researchers shall analyze the feasibility of implementing revenue neutral carbon taxation in the Indian context and consequently provide the modalities thereof, deriving assistance from the legal paradigm of the nations which have successfully levied this tax like Canada, Sweden and Finland amongst others.

 

Keywords : Carbon tax, Global Climate change, Revenue neutral tax, Cost effectiveness, Market-based approach, Cap-and-trade.

 

 

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