Carbon Tax and Pricing Models Quiz
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Questions and Answers

What is the biggest shortfall of a carbon tax, according to the text?

  • Consumers may not respond to incentives due to lack of alternatives (correct)
  • It creates a high tax burden for consumers
  • It leads to an increase in administrative burden
  • It directly limits the level of emissions
  • Why do some experts suggest a German carbon tax of 20 euros per tonne to be gradually increased over time?

  • To maintain international competitiveness
  • To prevent carbon leakage and ensure emissions reduction (correct)
  • To compensate for the high existing tax burden
  • To reduce bureaucracy
  • How do emissions trading systems (ETS) differ from a carbon tax?

  • They involve setting up a market for allowances based on government regulations
  • They directly limit the level of CO2 emissions
  • They grant exemptions for companies competing internationally
  • They cap emissions while allowing market participants to determine carbon prices (correct)
  • Why are allowances in emissions trading systems either given out for free, sold, or auctioned?

    <p>To generate additional public revenue for the government</p> Signup and view all the answers

    What is a crucial aspect of achieving objectives with a carbon tax according to the text?

    <p>Regularly adjusting the taxation level</p> Signup and view all the answers

    What pricing model is most discussed in Germany according to the text?

    <p>Carbon tax</p> Signup and view all the answers

    Why is the carbon tax considered effective based on the text?

    <p>It discourages the use of low-emission alternatives</p> Signup and view all the answers

    What did Sweden do when introducing a carbon tax according to the text?

    <p>Reduced other taxes like asset, capital, and income taxes</p> Signup and view all the answers

    How does Switzerland ensure social viability with its carbon tax, as per the text?

    <p>By repaying two thirds of the revenue via health insurance reimbursements</p> Signup and view all the answers

    Why do lower income groups get disproportionately affected by a carbon tax based on the text?

    <p>Because their energy, heating, and mobility costs are high relative to income</p> Signup and view all the answers

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