Quote:
Originally Posted by CDKPhil
How does a tax on carbon reduce CO2 emissions?
The producers pass on that tax to the consumer. The consumer gets compensated and uses as much product as they did to start with.
Phil
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Because the way to make money is to cut down on expenditure and company's will look to reduce expenditure every way they can so pricing carbon makes it more economical to reduce it anyway they can.
You say they can pass the cost on to consumers but in reality this will not work as they still need the consumer to buy the goods and in the case of luxury items especially people will go without so competition with other companies and the need for stock turnover will mean they have to find other ways to reduce the impact of the tax. The consumer is not going to be hundred percent compensated so they may not consumer as much as they did to start with.