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WorldBank encourages Bangladesh to implement Carbon Tax |
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Hello Tunza Eco family.
I have inactive on for the last few days since I continuously had final exams, reports and presentations. Now that they are over to some extent, it feels great to be back on this platform once again. And here's my next write-up. The World Bank has recommended the Bangladeshi government to impose carbon tax on the petroleum products of Bangladesh and also fix the retail prices in order to curb down carbon emissions. A carbon tax is basically a tax that is implemented on the carbon content of fuels which are the main contributors of harmful carbon dioxide emissions when the fuels are the burned. As the current situation has a low fuel prices due to the fall in prices in the global market, now is the ideal time for introducing carbon tax according to World Bank. A protracted period of low oil prices such as the one the world is currently experiencing is ideal for the introduction of carbon tax, the WB said. The current country director of World Bank, Qimiao Fan, sent a letter to the Finance Minister, AMA Muhith stating that the best approach is to let domestic prices follow the international prices while using carbon tax as a tool for carbon pricing. Qimiao Fan also attached an indepth analysis on the pricing of petroleum in Bangladesh as it was requested by our Finance Minister after the meeting with Annette Dixon, World Bank?s vice president for South Asia. The Economic Relations division of the Bangladesh government is seriously examining the proposal made by the World Bank. At one point, Bangladesh charged a lower price for petroleum products in the local market compared to the prices in the international market. This forced the government to bear the cost of huge subsidies. But now as the price of oil products has rapidly declined in the international market, the government has been reluctant to make the corresponding price adjustments. This strategy was pursued in order to ensure that the Bangladesh Petroleum Corporation is able to recover some of the losses it made in the past. The analysis of WorldBank says that according to the current macroeconomic situation of the country and the low petroleum prices in the international market, it is a unique opportunity to de-regulate the domestic oil prices. The current strategy of subsidizing oil prices has its negative impacts. The negative impacts include high levels of vehicle traffic on the road leading to congestion, increased rates of accidents as well as environmental pollution. Implementing the carbon tax truly seems to be an effective tool since it tackles two major problems with a single solution. Firstly, it will help to reduce the level of carbon emissions. Secondly it will help the Bangladeshi government to reduce its budget deficit formed by providing subsidies for oil products in the past. |
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8 Comments
Thank you for your feedback Minjoo!
Posted 13-06-2016 16:41
Syed, thanks for writing about carbon tax. I personally agree that carbon tax can bring positive effect in our environment. At first, a lot of complaints are expected from companies and manufacturers, but it is the government's role to persuade them to implement the policy. Thanks for sharing such article and have a great day!
Posted 13-06-2016 00:00
Hello Arushi. Tank you for your valuable feedback :)
Posted 12-06-2016 06:44
Carbon tax is indeed an environmentally and fiscally prudent measure. Great step in the right direction. Thanks for updating us.
Posted 11-06-2016 17:55
Thanks for your detailed feedback Heonjun. For now Bangladesh is making progress in reducing carbon emissions by comparing the different tools used by nearby countries. In probably a few months or maybe in a year or two, they will be implemented.
Posted 11-06-2016 16:45
Thanks for writing Syed! Carbon regulation needs a lot of underwater works. I guess the government would first have to manage backlash from the corporations. It would be even harder to successfully adopt a working system if more and more companies are foreign and not domestic. Also it takes long time even after the regulation system operates. In case of Korea, the country is not mandated to force carbon trade system but they decided to implement the system anyway, but it still has long way to go and some cacophony on the way. Thanks for introducing what's happening there.
Posted 11-06-2016 15:29
That's very insightful Adam. Thanks for your feedback :)
Posted 11-06-2016 14:37
It's definitely true that implementing carbon taxes may have its faults, but in an overall approach, it's for the better of the environment as well as, what you mentioned, the economical reduction of budget deficits. I know Mexico has implemented that kind of action and they have gone for the better. FYI, that was talked about in Paris' COP21. Thank you for your detailed article!
Posted 11-06-2016 07:55