Environmental Taxation

Environmental taxation refers to taxes imposed on activities that harm the environment, such as pollution or the use of fossil fuels. The idea is to encourage businesses and individuals to adopt cleaner practices by making environmentally harmful actions more expensive. For example, a carbon tax charges companies based on their carbon emissions, incentivizing them to reduce pollution. This approach aims to protect natural resources and promote sustainable practices while generating revenue that can be invested in environmental projects or renewable energy initiatives. Overall, it balances economic activity with ecological responsibility.