It’s called a Carbon Tax, and we can see a working example in Sweden.
Don’t believe it? Here’s a chart produced by the Swedish Environmental Protection Agency mapping the country’s economic growth against its CO2 emissions:
In an article submitted to the World Bank, Magdalena Andersson, the Swedish Minister for Finance, and Isabella Lövin, Minister for International Development Cooperation, argue that the positive economic results from their country’s huge carbon tax are “absolute”:
With the highest level of CO2 tax worldwide, Sweden provides strong evidence that decoupling GDP growth from CO2 emissions is possible and that CO2 tax is an efficient way of achieving a decrease in CO2 emission with fossil origin.
Noteworthy is also that this decoupling has been absolute, i.e. the emissions have decreased in absolute terms at the same time as GDP has increased. (A more common pattern is otherwise relative decoupling, meaning that emissions increase at a slower pace than GDP.) Moreover, a CO2 tax is relatively easy to administer and the tax revenues can be used where they are judged to contribute best to the overall goals for the society.
Of course, the implementation of a world wide carbon tax is completely unthinkable because, well, we have more important issues to tackle.
Like nothing whatsoever.
Ben Cohen is the editor and founder of The Daily Banter. He lives in Washington DC where he does podcasts, teaches Martial Arts, and tries to be a good father. He would be extremely disturbed if you took him too seriously.