Financial penalties are a great way to check excessive emissions. To minimize expenses, many businesses across Europe are working to reduce their carbon-inducing activities. Carbon taxes debuted in Finland in 1890; presently, Finland is joined by 18 other countries. Sweden boasts the highest carbon tax rate – €116.33 per tonne of carbon dioxide emission. Since implementing the carbon tax, Sweden has reduced carbon dioxide emissions by 25%, yielding a much-improved business and political economy.
Across Europe, sources of carbon emission include industrial processes, waste, transportation, agriculture, fuel combustion from industrial sources such as construction and production, and the energy industry processes. The energy industry emits up to 28% of the total CO2 emission.
The European Union (EU) is proposing new regulations to check excessive climate pollution. The returns from these financial regulations will be invested in protecting the climate. As part of the SDGs, the EU has raised its goals to a 55% reduction in carbon emissions by 2030. Major polluters will thus have to pay higher CO2 prices, leading them to embrace atmosphere-friendly processes for industrial activities.
Presently, emission taxes are levied on individuals as well as companies. The recipient of a carbon tax levy depends on the nature of the emission. An individual can be charged for emissions related to the burning of fuel or gas pumps, while companies are taxed on an estimated amount of CO2 produced per period.
Carbon trading is another initiative available to industries within the European Union. Carbon trading keeps industrial companies competitive against companies outside the EU by reducing burdensome carbon taxes. A company can purchase unused carbon credit from another company within the same nation, given that the latter has not exceeded the maximum amount of carbon emission allowed for industries.
The upside of carbon trading is that it imposes strict limits on the volume of emissions a nation can commit while allowing companies with a negative carbon footprint to balance the financial end of the business.
European countries utilize carbon taxes in different ways. In 2018, countries utilized up to 40% of revenues from carbon taxes on climate preservation projects. Sweden, France, and Finland are some countries committing a part of these revenues to their annual budgets.
Given the impact of high carbon taxes on overall expenses, industrial companies are inventing new ways to reduce carbon emissions. Some gas and oil companies, which spend one-tenth of their operating costs on carbon taxes, are controlling processes such as refining and cracking to reduce carbon or volatile substance emission. With the EU set to exert stricter regulations in the coming years, carbon emissions will decrease and clean energy will become prevalent.
Tree planting remains a viable approach to reducing carbon emissions into the air. At Rooted, we manage tree planting projects for different organizations within the European Union, negating the effects of carbon emissions in the air. Having absorbed up to 1000 tonnes of CO2 through tree planting, we are committed to raising a clean energy environment through afforestation.