What Is a Carbon Tax

question 32

Multiple Choice

What is a carbon tax?

• A) A policy that implements a higher tax on gasoline and other fossil fuels to curb their use.
• B) A policy that requires industries to pay taxes on emissions that go beyond an established yearly quota.
• C) A tax placed on oil companies to fund the development of renewable energy sources.
• D) A proposed plan to monitor the carbon emissions of individual households, much like electricity meters, and adjust property taxes higher with higher emissions.

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Definitions:

Price

The amount of money required to purchase a good or service, which can fluctuate based on supply and demand dynamics.

Production Technology

The set of processes, methods, or equipment used by firms in the production of goods or services, which affects productivity and efficiency.