key term - Carbon tax

Definition

A carbon tax is a fee imposed on the burning of carbon-based fuels (coal, oil, gas) aimed at reducing greenhouse gas emissions. It's designed to incentivize businesses and consumers to shift towards cleaner energy sources by making fossil fuels more expensive.

Related terms

Greenhouse Gas Emissions:

The release of gases into Earth’s atmosphere that trap heat, contributing to global warming.

Collective Action Problem: A situation where individuals' or groups' interests conflict with the collective good, making cooperation difficult but necessary for better outcomes.

Environmental Policy: Government actions and procedures aimed at protecting the environment from harm caused by human activities