Not Europe, This Country Had the Highest Carbon Tax Rate in 2022

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Adi Ahdiat 07/11/2022 13:00 WIB

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According to World Bank data, as of April 2022, Uruguay had the highest carbon tax rate.

Top 10 Countries with the Highest Carbon Tax Rates Globally (April 2022)

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Not Europe, This Country Had the Highest Carbon Tax Rate in 2022

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Top 10 Countries with the Highest Carbon Tax Rates Globally (April 2022)

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According to the World Bank's *State and Trends of Carbon Pricing 2022* report, 37 countries currently implement a carbon tax.

A carbon tax is levied on users of fossil fuels such as coal, oil, and natural gas.

Carbon tax systems vary by country. Finland, for example, applies higher tax rates to emissions from the transportation sector than other sectors. Denmark, on the other hand, applies different rates to emissions from gasoline and gas usage.

Despite variations in systems and rates, carbon taxes are generally measured in tons of carbon dioxide equivalent (tCO2e).

According to World Bank data, as of April 2022, Uruguay had the highest carbon tax rate at US$137 per tCO2e. This South American country's carbon tax rate surpasses those of European countries, as shown in the graph.

Only two Asian countries, Singapore and Japan, have implemented a carbon tax. However, their rates are relatively low, at US$3.69 per tCO2e in Singapore and US$2.36 per tCO2e in Japan.

Earlier this year, Indonesia planned to implement a carbon tax on coal-fired power plants (PLTU) at a rate of US$2 per tCO2e. However, the government later postponed the plan.

"With the current situation, we are recalculating the impacts; we cannot provide details. Hopefully, (the carbon tax) will be implemented next year or by 2024," said Energy and Mineral Resources Minister Arifin Tasrif, as reported by *Katadata.co.id* on Friday, October 14, 2022.

"What will be the impact of this carbon tax on our industrial products? We are afraid it will become more expensive. We will conduct a trial first, so we will wait," he continued.

The World Bank states that carbon taxes are necessary to reduce air pollution, curb greenhouse gas emissions, and mitigate global warming. However, implementing this policy requires careful consideration.

"Implementing a carbon tax is politically challenging, especially amid rising inflation and energy prices. Countries need to ensure that carbon tax policies are fair, effective, and integrated with climate and social policies," the World Bank said in its report.

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."