Taxing electricity, natural gas, gasoline and other energy sources related to the emission of carbon dioxide with the objective of restricting the consumption of fossil fuels, so reducing carbon dioxide emissions and stabilizing and eventually reducing concentrations of atmospheric carbon dioxide (CO2).
It was reported in 1993 that integrated climate-economic modelling studies suggested that a carbon tax of US$126/tonne might meet the IPCC objective of an annual worldwide decrease in carbon dioxide emissions of 1 to 2%. It is estimated that a tax high enough to have significant impact on climate change issues would necessarily have to raise thousands of millions of dollars a year (compared, for example, with the annual UN budget of about $1,000 million).
Although they may have a place in sanctifying the conscience of the richer countries, domestic carbon taxes are unlikely to be either a fair or an efficient system of reducing global carbon emissions. Only internationally-levied taxes could separate efficiency issues from those of equity.