What is the difference between a carbon tax and a carbon tariff?



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    Tariff refers to taxes on imported or exported goods. Carbon tax, on the other hand, would apply to any businesses (or other entities) within the country and be based on their carbon emissions, especially those that arise from burning fossil fuels. This is where the tariffs kick in: you can be pretty sure that carbon tax adoption would be done country by country at different times. That means that a business might decide to move to a neighboring state that doesn’t have a tax. So one of the solutions to discourage this behaviour is to use carbon tariffs on imports from such countries.

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