The harmful Green House gases are polluting the environments and to control its effect Carbon Taxes are being imposed.The exercise is aimed to discourage irresponsible citizen contributing to the Global Warming.This threat to environment implies a social cost that humanity has to bear.
In order to curb uncontrolled emissions by industry, governments often levy a charge on carbon emission thrown into the atmosphere.This help them to create funds that can be used to help not only in development of low carbon technologies but also in bringing,parity in unit prices of energy based on fossil-fuels and renewable sources.
this enables investors and consumers to rationally evaluate the option in a holistic manner.the social and environmental costs that polluting industries induce in the absences of such regulations are called ‘negative’ externalities . These negative externalities must be absorbed into the cost of production to reflect the ‘real’ costs.
However,of late,there has been strong public resentment over such acts of government.