Question

To keep either weak or strong sustainability, we can do something. Given the two cases, 1) a carbon tax imposed on primary production (supply side, firms) and 2) a carbon tax imposed on end-users (demand side, consumers),

• What kind of benefits that we can expect from each case?
• For instance, what would be the behavioral changes in producers and consumers?
• Which one is more cost-efficient?

Answer 1

1) producer side or supply side taxation is help to produce green goods or less use of carbon fosssil or pollution creating element during production. As their products are costly in prices consumer try to replace them from cheaper goods.

While tax on consumer will tend to increase cost of products for them and thus deceasing their purchasing power or demand and thus they try to purchase green goods intead of non Green.

I think tax on cosumer will be more helpful or efficient as it will aware consumer towards to purchase green goods and also increase prices as a result decrease in demand as not purchase green good and thus also aware producer to produce green good using green or environment friendly methods otherwise consumer try to find new alternative or purchase green good instead and which pave a way to loss for producers.

In this way taxation reflect in the behavior of producers and consumer to uses green method or environment friendly thing in production and during purchasing thing which will help in reducing carbon emissions and thus protect from climate changes.