Reluctance to impose pollution taxes

Taxes on carbon dioxide and other atmospheric pollutants could have a considerable impact on global warming, encouraging suppliers and users of energy to conserve energy and switch to less carbon-intensive technologies. National governments have been tardy to proceed with this option, against objections from industrial producers, the transport and agricultural sectors, and domestic consumers. Commercial interests are concerned that increased prices will make them less competitive on the export market and too expensive for domestic consumers with reduced spending power.

One analysis calculated that a phased-in tax of $170 per ton of carbon in OECD countries and $85 per ton in other countries would by 2020 yield estimated reductions in carbon dioxide emissions comparable with an across-the-board cut of 30% of energy use. A tax of $85 per ton of carbon is roughly equivalent to $10 per barrel of oil or equivalent proposed by the EEC/EU in 1992.