May 24, 2024

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Commonwealth carbon tax model law launched to help countries reduce greenhouse gas emissions

A new model law launched today by the Commonwealth Secretariat will help countries implement a carbon tax to reduce greenhouse gas emissions and achieve the Paris Agreement’s goal of limiting global heating to 1.5°C.

The Commonwealth Carbon Tax Model Law was presented at a high-level event on 6 December 2023 in Dubai, the United Arab Emirates, during the United Nations Climate Change Conference (COP28).

Guided by the ‘polluter-pay principle’, the model law provides for an easily administrable carbon tax, with the tax being levied on fossil fuels companies and industrial emitters. This approach will help ensure that the majority of emissions in most Commonwealth countries are taxed.

Governments and legislators from the 56 Commonwealth countries can use the model law as a starting point to draft new legislation or adapt certain provisions to existing statutes in line with their local circumstances and national climate plans.

Implementing a carbon tax outlined in the model law would help countries reduce their carbon emissions, attract new investment for clean energy and boost government revenue, while contributing to their national climate commitments under the Paris Agreement.

Launching the model law, the Commonwealth Secretary-General, the Rt Hon Patricia Scotland KC, said:

“Delivering the Paris Agreement remains humanity’s greatest hope. But globally, current climate action is too weak and too slow, while the window for action continues to narrow.

“There is widespread agreement that one of the most effective ways to help countries meet the net-zero carbon emissions target of the Paris Agreement is carbon taxation.

“Considering the growing interest in this area and the need for a coordinated approach, this model law is a valuable resource for all 56 Commonwealth countries, as they seek to avoid the worst effects of climate change and introduce policies for a more sustainable and prosperous common future.”

To ensure a just transition, the model law includes provisions for measuring and mitigating the carbon tax’s impact on low-income households and other vulnerable groups.

This is achieved through regular impact reporting, stakeholder engagement and by directing revenue generated from the carbon tax towards supporting clean energy initiatives for low-income households.

The new model law is the latest in a series of Commonwealth model laws produced by the Commonwealth Secretariat.

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