The Environment Ministry in Japan proposed a new carbon tax to meet Japan's obligations to reduce carbon dioxide emissions under the Kyoto Treaty. The tax would be levied on producers and importers of fossil fuels, and the expectation is that it would be largely passed on to consumers. The rationale for this tax is that it will:

Question

Quizplus · Accepted Answer

The carbon tax is intended to reduce carbon dioxide emissions, which are a negative externality because they impose costs on society that are not reflected in the market price of fossil fuels.

The Environment Ministry in Japan Proposed a New Carbon Tax