Carbon Tax Regime Research Articles

Research on the influence of consumer Perceived Value on the purchase of new energy vehicles

In recent years, low carbon economy has gradually become a hot issue of global concern. At present, Chinese consumers are still in the initial stages of understanding and research on carbon tax. By analysing various carbon tax regimes domestically and abroad, this article employs a quantitative research methodology to explore the influence of consumer perceptions on customers' purchase of new energy vehicles. This paper concentrates on the operational models of several major carbon tax systems at home and abroad and provides a thorough overview of the setting of carbon tax schemes, risk management, and the economics of carbon trading in each country. Drawing on the experiences of foreign countries and regions in implementing carbon tax schemes, this paper offers suggestions on how China can design carbon tax policies to promote green consumption behavior among contemporary Chinese consumers.

Does the South African Carbon Tax Incentivise Mines to Invest in Solar Photovoltaic?

The aim of this study was to evaluate the adequacy of South Africa’s carbon pricing policy in incentivising adoption of Solar photovoltaic in South African mines. A qualitative study was conducted to evaluate the adequacy of South Africa’s carbon tax policy design to encourage adoption of solar photovoltaic in mines. The study further establishes the carbon pricing level that will induce South African miners to invest in Solar photovoltaic through a net present value simulation. A review of South Africa’s Carbon Tax regime highlights that the policy shortcomings can be attributable to low carbon prices, excessive free emission allowances, and continued subsidy support of fossil fuels. Furthermore, the carbon price needs to exceed cost of abatement to encourage investment in decarbonisation measures. A net present value simulation finds that a carbon price of ZAR 668.62 per tonne of CO2 would need to be levied to incentivise mining entities to invest in solar photovoltaic. The study recommends higher carbon prices be levied for carbon for emissions to encourage mining entities to adopt solar photovoltaic renewable energy. The paper contributes to tax policy scholarship on designing a carbon pricing model for South Africa’s mining sector. Decarbonising the mining industry, a significant contributor of GHG emissions, will advance the decarbonisation efforts of South Africa.

Impact of Carbon Emissions and Advance Payment on Optimal Decisions for Perishable Products via Parametric Approach of Interval

Under the heading of sustainability challenges, this study incorporates payment procedures and inventory selections. The article’s goal is to acquire insight into how the methods of payment affect perishable product inventory selections under the widely utilised carbon tax regime in view of policies to reduce emissions. Uncertainty arises as a natural consequence of the unpredictable behaviour of customers. Keeping these impacts in mind, an interval-valued inventory model is introduced, where all the related inventory parameters are considered interval-valued. In addition, the vendor offers an interval-valued discount rate to customers against advance payment. Due to the inventory parameters being chosen as interval-valued, the objective function is changed into an interval-valued form, and the corresponding differential equation is changed into an interval differential equation. To solve the interval-valued differential equation, a parametric approach to interval is introduced, and the corresponding interval-valued objective function is constructed. Interval order relations and the MATHEMATICA software are used to solve the objective function with interval values. To assess the validity of the proposed model, one numerical example is solved, and a sensitivity analysis of the ideal course of action is performed.

Duopoly with Limited Rationality in Carbon Market: A Comparison of Carbon Quota Trading and Carbon Tax System

China has established a nationwide carbon quota trading market. Drawing upon international experiences and the strategic vision of the Chinese government, it is anticipated that China will soon incorporate a carbon tax system. The futurescape envisions a parallel progression of both the carbon market and the carbon tax system. This prompts an exploration into the circumstances where one should prioritize the carbon market system over the other, and vice versa. This paper constructs a repeated oligopoly game model to juxtapose equilibrium points under both carbon trading and tax regimes. Through rigorous analysis, it is discerned that under a duopoly with bounded rationality and inelastic pricing, if the carbon tax is set referencing the clearing price of the carbon market, then both the carbon trading and tax regimes can achieve identical emission reduction outcomes. Stemming from this revelation, for regions with established inelastic, oligopolistic carbon markets, it would be prudent to manage emission sources not included in the carbon market by setting a carbon tax in line with the market's clearing emission price. Furthermore, measures might be considered to dismantle such oligopolistic dominance to enhance emission reduction efficiency, or to transition from the carbon market to a tax regime for cost-efficient administration. For regions yet to embrace a carbon pricing mechanism, if there's an anticipation of forming an oligopolistic and inelastic carbon market, given the lower administrative costs, diminished enterprise operational risks, and broader coverage of the carbon tax regime, the region should gravitate towards the carbon tax system as a priority.

Impact of carbon border adjustment mechanism on China's manufacturing sector: A dynamic recursive CGE model based on an evolutionary game

As the global carbon emission problem is getting more and more serious, the European Union has proposed the Carbon Border Adjustment Mechanism (CBAM) to prevent carbon leakage, which will have an impact on China's foreign trade. Based on this background and the problems of current research that ignores factors such as commodity prices, long-term impacts, intertemporal substitution analysis, and changes in national strategies for foreign exports, this paper propose a Computable General Equilibrium (CGE) model based on an evolutionary game as a dynamic recursive basis to study the impact of the CBAM on the Chinese manufacturing industry. For the industries mentioned in the CBAM, 18 affected sectors are collated, and a CGE model containing multiple blocks such as production, trade, and carbon emissions is built. Meanwhile, we establish an evolutionary game model with EU suppliers, manufacturers, and the government, allowing Chinese suppliers to compete with EU suppliers. Based on the above model, the impact of carbon tariff policies from 2020 to 2050 is studied. The results indicate that under the intra-EU competition condition, carbon tariffs will reduce the price of Chinese exports and slightly decrease China's real GDP, as well as the carbon emission intensity of 18 sectors and fossil energy. However, the impact of carbon tariffs on overall carbon emissions is small and is essentially a protective policy. In addition, the evolutionary game-based CGE model takes into account the dynamic strategies of both sides and is therefore less affected by carbon tariff shocks and recovers more quickly and more realistically. Finally, the article argues that the advantage of carbon tariffs for local suppliers is unsustainable and Chinese suppliers will still dominate, and local suppliers need more subsidies from the EU government. On the other hand, the Chinese government needs to implement a stricter carbon tax regime and export subsidies to improve the competitiveness of Chinese products in terms of green levels and price advantages. The purpose of this paper is to examine the quantitative impacts of CBAM on China's related manufacturing industries and strategies to maximize the benefits to both governments.

Carbon tax effect difference on net-zero carbon emissions target and social welfare level promotion

This research aims to find the best carbon tax regime for the achievement of net-zero carbon emissions and promotion of social welfare level. We discuss two regimes in this study, including carbon tax on total social welfare level (CTTW) and carbon tax on single social welfare level (CTSW). Findings show that the best regime depends on product substitution and product price elasticity of demand. Industrial transformation not only causes changes in product substitution and product price elasticity of demand, but also makes these two regimes have different effects on the achievement of net-zero carbon emissions and promotion of social welfare level.

Distributional effects of carbon pricing when considering household heterogeneity: An EASI application for Austria

This paper studies the distributional impacts of a carbon tax in Austria and explores compensating measures to mitigate negative side effects. We extend previous studies by focussing on household heterogeneity, i.e. how housing attributes and socio-demographics govern a household's vulnerability to energy price increases. We apply the EASI demand system, which captures non-linear Engel curves and heterogeneous preferences; both crucial to estimate energy consumption. By simulating stylised, separate price increases we identify how seemingly overall similar welfare effects differ, depending on the energy good taxed, the region a household lives in, year of construction and household composition. These impact channels, with the severity of impacts differing according to various household characteristics are also reflected by the carbon tax scenario and reveal the importance of targeted support schemes. Although, each of the tested transfer schemes is able to enhance equality and cushion negative welfare effects, transfer schemes focussing on household size or on particular vulnerable population segments show the strongest effects in terms of equality, proportionality of the tax burden and welfare. Consequently, in order to yield a socially fair energy or carbon tax regime, taking household heterogeneity into account is essential.

How does a carbon tax affect Britain’s power generation composition?

The purpose of this paper is to determine the effect of different carbon tax rates on the power generation composition of Britain. This was accomplished via a regional, geospatial model, accounting for regional loads, transmission losses and generators of Britain’s current energy infrastructure. This regional model is also compared to a pure dispatch, nationally aggregated model which considers only costs on the generator side inclusive of the carbon tax, thus allowing the effect of including geospatial conditions to be identified. The effect of this tax (in both the geospatial and nationally aggregated cases) is a transition from coal to combined cycle gas turbine (CCGT) generated power to fulfil demand unmet by nuclear or renewable sources. The more sophisticated regional model, however, differs from the nationally aggregated case by having a significantly larger window of carbon tax rates over which this coal to CCGT transition occurs. Due regional differences in demand and installed capacity technology types it is determined that more than 50% of this transition occurs prior to CCGT becoming more economical than coal from a pure dispatch (nationally aggregated) perspective. Primarily due to CCGT generators typically being closer to larger southern loads than northern coal, transmission losses and the economic disincentive of a carbon tax combine in encouraging this transition. The transition window, therefore, is not only broadened by the consideration of geospatial effects, but furthermore, this broadening significantly and disproportionately occurs by decreasing the lower bound of this transition window. These findings validate the significance of utilising a geospatial model, particularly of regional resolution. They further identify the deployment of current energy infrastructure in Britain under differing carbon tax regimes and by extension, the transition window (found to be from coal to CCGT) an increasing carbon tax rate would create. These results bear not only significance in understanding the UK’s currently incrementing (top-up) carbon tax rate, but also shed light on future policies due to the UK’s leaving of the EU’s Emissions Trading Scheme (ETS), with immediate plans to continue with a domestic carbon tax and trading scheme. Thus, these results hold importance in the understanding the effect of carbon taxation on existing infrastructure, energy modelling and national policy in the UK.

Incentives and Emission Responsibility Allocation in Supply Chains

Because greenhouse-gas (GHG) emissions from the supply chains of just the 2,500 largest global corporations account for more than 20% of global emissions, rationalizing emissions in supply chains could make an important contribution toward meeting the global CO2 emission-reduction targets agreed upon in the 2015 Paris Climate Agreement. Accordingly, in this paper, we consider supply chains with joint production of GHG emissions, operating under either a carbon-tax regime, wherein a regulator levies a penalty on the emissions generated by the firms in the supply chain, or an internal carbon-pricing scheme. Supply chain leaders, such as Walmart, are assumed to be environmentally motivated to induce their suppliers to abate their emissions. We adopt a cooperative game-theory methodology to derive a footprint-balanced scheme for reapportioning the total carbon emissions amongst the firms in the supply chain. This emission responsibility-allocation scheme, which is the Shapley value of an associated cooperative game, is shown to have several desirable characteristics. In particular, (i) it is transparent and easy to compute; (ii) when the abatement-cost functions of the firms are private information, it incentivizes suppliers to exert pollution-abatement efforts that, among all footprint-balanced allocation schemes, minimize the maximum deviation from the socially optimal pollution level; and (iii) the Shapley value is the unique allocation mechanism satisfying certain contextually desirable properties. This paper was accepted by Jayashankar Swaminathan, operations management.

Determining a Carbon Tax Rate for India in the Context of Global Climate Change

Global warming has been described as “the biggest externality the world has ever seen”. With international policymaking gradually taking into account initiatives to tackle climate change, the idea of putting a price on carbon has also received much acclaim. Pricing carbon, in the form of a carbon tax, was put forward as a policy initiative with the commencement of the Paris Climate Summit of 2015, as such a policy, could address emissions at the sources while being the least intrusive with the lowest burden on taxpayers. India is the third largest emitter of greenhouse gases globally but has also been a pioneer in acknowledging carbon taxes. The government has claimed its high excise duties on petrol and diesel, along with the Clean Environment Cess on coal consumption, to be implicit carbon taxes. Interestingly, while a carbon tax should be linked to carbon emissions, current indirect taxes by the government are not at all linked to them while are mostly used as revenue generating measures or compensating the States as part of GST revenue losses. This paper envisages to examine the case for introducing a carbon tax regime in India vis-à-vis fossil fuel consumption in the economy, with a subsequent determination of a unique carbon tax rate for India. To achieve India’s Nationally Determined Contribution (NDC) targets of Paris Summit, it is imperative that India introduces an explicit carbon tax that links fuel prices to emissions, which can have a cascading effect of reducing their consumption while switching to cleaner fuels as substitutes. Findings from the study indicate that coal faces a minimal tax burden while being the most polluting whereas natural gas faces a high tax burden even though it is cleanest among all. As part of the study, a tax rate has been derived that is expected to act as a policy benchmark and can nudge tax policies in the right way, as switching to a low-carbon economy forms a primary agenda of India, in this era of a hothouse Earth.

Household welfare and CO2 emission impacts of energy and carbon taxes in Mexico

We analyse the effects of environmental taxes on welfare and carbon emissions at the household level for the case of Mexico. The integrated welfare-environmental analysis, which is based on a censored energy consumer demand system, extends previous work in two ways. First, the estimation of a full matrix of substitution elasticities allows us to test the necessity of incorporating second-order effects into the welfare analysis. Second, the substitution elasticities derived from the demand system are used to estimate the shortrun CO2 emission-reduction potential. We find that first-order approximations of welfare effects provide reasonable estimates, particularly for carbon taxes. Analog to evidence in other low- and middle-income countries, the taxation of all energy items is found to be regressive, with the exception of motor fuels. The analysis of the emission implications of different tax scenarios indicates that short-run emission reductions at the household level can be substantial - though the effects depend on how revenue is recycled. This effectiveness combined with moderate and manageable adverse distributional impacts renders the carbon tax a preferred mitigation instrument. Considering the large effect of food price increases on poverty and the limited additional emission-saving potential, the inclusion of CH4 and N2O in a carbon tax regime is not advisable.

Household Welfare and Co2 Emission Impacts of Energy and Carbon Taxes in Mexico

We analyse the effects of environmental taxes on welfare and carbon emissions at the household level for the case of Mexico. The integrated welfare-environmental analysis, which is based on a censored energy consumer demand system, extends previous work in two ways. First, the estimation of a full matrix of substitution elasticities allows us to test the necessity of incorporating second-order effects into the welfare analysis. Second, the substitution elasticities derived from the demand system are used to estimate the short-run CO2 emission-reduction potential. We find that first-order approximations of welfare effects provide reasonable estimates, particularly for carbon taxes. Analog to evidence in other low- and middle-income countries, the taxation of all energy items is found to be regressive, with the exception of motor fuels. The inclusion of CH4 and N2O in a carbon tax regime comes with particularly regressive impacts because of its strong effects on food prices. The analysis of the emission implications of different tax scenarios indicates that short-run emission reductions at the household level can be substantial – though the effects depend on how revenue is recycled. This effectiveness combined with moderate and manageable adverse distributional impacts renders the carbon tax a preferred mitigation instrument. Considering the large effect of food price increases on poverty and the limited additional emission-saving potential, the inclusion of CH4 and N2O in a carbon tax regime is not advisable.

Unintended possible consequences of fuel input taxes for individual investments in greenhouse gas mitigation technologies and the resulting emissions

Background: South Africa is planning to introduce a carbon tax as a Pigouvian measure for the reduction of greenhouse gas emissions, one of the tax bases designed as a fuel input tax. In this form, it is supposed to incentivise users to reduce and/or substitute fossil fuels, leading to a reduction of CO2 emissions.Aim: This article examines how such a carbon tax regime may affect the individual willingness to invest in greenhouse gas mitigation technologies.Setting: Mathematical derivation, using methods of linear programming, duality theory and sensitivity analysis.Methods: By employing a two-step evaluation approach, it allows to identify the factors determining the maximum price an individual investor would pay for such an investment, given the conditions of imperfect markets.Results: This price ceiling depends on the (corrected) net present values of the payments and on the interdependencies arising from changes in the optimal investment and production programmes. Although the well-established results of environmental economics usually can be confirmed for a single investment, increasing carbon taxes may entail sometimes contradictory and unexpected consequences for individual investments in greenhouse gas mitigation technologies and the resulting emissions. Under certain circumstances, they may discourage such investments and, when still undertaken, even lead to higher emissions. However, these results can be interpreted in an economically comprehensible manner.Conclusion: Under the usually given conditions of imperfect markets, the impact of a carbon tax regime on individual investment decisions to mitigate greenhouse gas emissions is not as straight forward as under the usually assumed, but unrealistically simplifying perfect market conditions. To avoid undesired and discouraging effects, policy makers cannot make solitary decisions, but have to take interdependencies on the addressee´s side into account. The individual investor´s price ceiling for such an investment in imperfect markets can be interpreted as a sum of (partially corrected) net present values, which themselves are a generalisation of the net present values known from perfect markets

Integration of regional electricity markets in Australia: A price convergence assessment

From an electricity market design perspective, it is relevant and practical to know which market structures allow for price convergence, and how long this takes to achieve. This study employs the Phillips and Sul (2007, 2009) methodology to test for the convergence of wholesale electricity prices across the Australian States. We identify a long-run, common price growth pattern that applies to a cluster formed by three Eastern States that share common market characteristics and limited physical interconnection. We also find another cluster with less competitive market structures that, although not interconnected, strongly converge towards their own trend. These findings confirm theoretical expectations while quantifying the rate of convergence. Finally, we also investigate the role that the carbon tax regime has played in the convergence process, with new empirical showing that the previous results are not affected, with the notable exception being the case of South Australia.

How to price carbon in good times … and bad!

Emissions trading systems and carbon taxes are two market‐based policy instruments for responding to the climate change externality. This article focuses on the relationship between the design of these carbon pricing instruments and business cycle fluctuations. In particular, whether and how these instruments should respond to business cycles is a topical policy question. To answer it, the article brings together the relevant empirical and theoretical results from the academic literature. It finds that building responsiveness into the design of carbon pricing instruments can reduce the burden of regulation by distributing it more evenly over time. Specifically, relative to a fixed cap emissions trading system, this can be achieved by relaxing the cap during economic expansions and tightening it during recessions. Similarly, a carbon tax regime in which the tax is higher during expansions, and lower during recessions, is likely to improve welfare compared to a cyclically unresponsive tax. In practice, a mechanism which renders real‐world carbon pricing instruments responsive is challenging to construct. The article provides an overview of the trade‐offs involved by focusing on the broad classes of mechanisms explored in the literature. The choice of responsiveness‐inducing mechanism must crucially consider country characteristics such as the properties of fluctuations in the country's GDP and emissions, any relevant political economy concerns and its institutional background. WIREs Clim Change 2016, 7:135–144. doi: 10.1002/wcc.375This article is categorized under: Climate Economics > Economics of Mitigation

Integrated assessment of global water scarcity over the 21st century under multiple climate change mitigation policies

Abstract. Water scarcity conditions over the 21st century both globally and regionally are assessed in the context of climate change and climate mitigation policies, by estimating both water availability and water demand within the Global Change Assessment Model (GCAM), a leading community-integrated assessment model of energy, agriculture, climate, and water. To quantify changes in future water availability, a new gridded water-balance global hydrologic model – namely, the Global Water Availability Model (GWAM) – is developed and evaluated. Global water demands for six major demand sectors (irrigation, livestock, domestic, electricity generation, primary energy production, and manufacturing) are modeled in GCAM at the regional scale (14 geopolitical regions, 151 sub-regions) and then spatially downscaled to 0.5° × 0.5° resolution to match the scale of GWAM. Using a baseline scenario (i.e., no climate change mitigation policy) with radiative forcing reaching 8.8 W m−2 (equivalent to the SRES A1Fi emission scenario) and three climate policy scenarios with increasing mitigation stringency of 7.7, 5.5, and 4.2 W m−2 (equivalent to the SRES A2, B2, and B1 emission scenarios, respectively), we investigate the effects of emission mitigation policies on water scarcity. Two carbon tax regimes (a universal carbon tax (UCT) which includes land use change emissions, and a fossil fuel and industrial emissions carbon tax (FFICT) which excludes land use change emissions) are analyzed. The baseline scenario results in more than half of the world population living under extreme water scarcity by the end of the 21st century. Additionally, in years 2050 and 2095, 36% (28%) and 44% (39%) of the global population, respectively, is projected to live in grid cells (in basins) that will experience greater water demands than the amount of available water in a year (i.e., the water scarcity index (WSI) > 1.0). When comparing the climate policy scenarios to the baseline scenario while maintaining the same baseline socioeconomic assumptions, water scarcity declines under a UCT mitigation policy but increases with a FFICT mitigation scenario by the year 2095, particularly with more stringent climate mitigation targets. Under the FFICT scenario, water scarcity is projected to increase, driven by higher water demands for bio-energy crops.

Role of technologies in energy-related CO2 mitigation in China within a climate-protection world: A scenarios analysis using REMIND

In a world with the need of climate protection through emission reduction, China’s domestic mitigation will be put on the national agenda. The large-scale deployment of innovative technologies induced by climate policies is a key determinant for reducing emissions in an effective and efficient manner. A distinguishing feature of the Chinese energy sector (especially electricity generation), is that investment costs are significantly lower than in other world regions. Represented in the methodological framework of the augmented REMIND model, three promising mitigation technologies (also known as technology clusters) in the electricity sector: CCS with advanced coal-generation technologies, nuclear, and renewables are the focus of this study. The scenarios are designed to analyze the roles of these technologies and their associated economic impacts under a climate policy (i.e., a carbon tax). Our results indicate that:(1)Technology policies improving the techno-economic features of low-carbon technologies are insufficient to restrain China’s increasing emissions.(2)Carbon-pricing policies can effectively reduce emissions by making low-carbon options more competitive than conventional fossil fuel alternatives. In the global carbon tax regime framed in this paper, China’s mitigation potential is larger than that of any of other region and the peak of emissions occurs earlier (by 2020) and is 50% lower than in the BASE scenario.(3)CCS is important, but the window of opportunity for its deployment is limited to the near- to mid-term future. It is important to lower the cost of the carbon tax by supplying CCS technology; however, the gains from CCS for the “myopic” fossil fuel sectors are limited, compared to the case without CCS. Therefore, strong social support for CCS development should be implemented, if it is to be an effective mitigation option.(4)The cost of nuclear is a major determinant of the future development pattern in China’s power sector. Renewables are the long-term solution (with large-scale deployment only after 2030, solar PV in particular) for deep emissions mitigation. The creative policies reflected by alternative investment, technology innovation, and climate protection strategies should be explored and implemented to make use of their long-term potential.

Climate mitigation policy implications for global irrigation water demand

Measures to limit greenhouse gas concentrations will result in dramatic changes to energy and land systems and in turn alter the character of human requirements for water. We employ the global change assessment model (GCAM), an integrated assessment model, to explore the interactions of energy, land, and water systems under combinations of three alternative radiative forcing stabilization levels and two carbon tax regimes. The paper analyzes two important research questions: i) how large may global irrigation water demands become over the next century, and ii) what are the potential impacts of emissions mitigation policies on global irrigation-water withdrawals. We find that increasing population and economic growth could more than double the demand for water for agricultural systems in the absence of climate policy, and policies to mitigate climate change further increase agricultural demands for water. The largest increases in agricultural irrigation water demand occur in scenarios where only fossil fuel emissions are priced (but not land use change emissions) and are primarily driven by rapid expansion in bio-energy production. Regions such as China, India, and other countries in South and East Asia are likely to experience the greatest increases in water demands. Finally, we test the sensitivity of water withdrawal demands to the share of bio-energy crops under irrigation and conclude that many regions have insufficient space for heavy bio-energy crop irrigation in the future—a result that calls into question the physical possibility of producing the associated biomass energy, especially under climate policy scenarios.

Economic analysis of desalination technologies in the context of carbon pricing, and opportunities for membrane distillation

The economics of membrane distillation (MD) and common seawater desalination methods including multi effect distillation (MED), multistage flash (MSF) and reverse osmosis (RO) are compared. MD also has the opportunity to enhance RO recovery, demonstrated experimentally on RO concentrate from groundwater. MD concentrated RO brine to 361,000mg/L total dissolved solids, an order of magnitude more saline than typical seawater, validating this potential. On a reference 30,000m3/day plant, MD has similar economics with other thermal desalination techniques, but RO is more cost effective. With the inclusion of a carbon tax of $23 per tonne carbon in Australia, RO remained the economically favourable process. However, when heat comes at a cost equivalent of 10% of the value of the steam needed for MD and MED, under a carbon tax regime, the cost of MD reduces to $0.66/m3 which is cheaper than RO and MED. The favour to MD was due to lower material cost. On low thermally, high electrically efficient installations MD can desalinate water from low temperature (<50°C) heat sources at a cost of $0.57/m3. Our assessment has found that generally, MD opportunities occur when heat is available at low cost, while extended recovery of RO brine is also viable.

Internalizing Externalities: the GATT-Legality of Border Tax Adjustments and the Compelling Need for its Implementation

The nations of this world face the intersection of two global dilemmas: enhancing economic welfare and mitigating climate change. With a “point of no return,” for the latter of these predicaments rapidly approaching and evidence that unilateral action on either of these problems haven proved minimally, if it all, effectual, the world faces a pervasive and imminent threat. However, recent international jurisprudence and global sentiment has allowed for a single solution to each of these quandaries in the form of a carbon tax regime. Previous scholarship has focused on structural deficiencies within the World Trade Organization that prevent certainty and encourage inaction or organizational modification, few have looked to the possibilities present within the current regime and how using said structures may enable the efficacy of unilateral action vis-a-vis each of these dilemmas. A carbon tax regime consisting of both domestic carbon taxes and border tax adjustments for those who fail to comply with the international efforts potentially meets both the strictures under the Kyoto Protocol and the World Trade Organization and creates an more efficient market from one that has formerly been woefully inefficient. As commentators note the imminence for a time of action, few if any solutions match the efficacy of a carbon tax regime in complying with the regulatory parameters currently permitted with a small mass of nations serving to effect substantial change regarding climate change mitigation while complying with international trade laws.