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Carbon tax on fossil fuel

June 01, 2017 00:00:00

According to a recent Reuters news, Bangladesh will introduce carbon tax on fuel from this June. The news of imposing carbon tax has drawn mixed reactions from the people. While some businesses and environmental groups have welcomed the plan, some feared adverse effect.

Bangladesh has a commitment to reduce carbon emissions by 5.0 per cent in its Nationally Determined Contribution (INDC) during COP21 in Paris. According to Paris Climate Agreement, signatory countries must take measures as per their national climate action plan. The new tax may not make any significant contribution to achieving the Paris Agreement's goal of keeping average global temperature increases below 2 degrees Celsius above pre-industrial levels but Bangladesh government will be able to collect the revenue and allocate the funds to set up Green Projects. Moreover, Carbon taxes will convey a message to the international community that Bangladesh is willing to play a part in global climate change mitigation.

However, capitalist market system is not likely to meet social needs and we cannot expect that renewable energy will overtake fossil fuels in the market overnight. So, there is a possibility that carbon tax will increase the cost of fossil fuels, and therefore increase expenditures. Also there is the issue of electricity price. Most of the sources of our electricity are fossil-fuel burning power plants.  In a developing country like Bangladesh, it is difficult for people to afford a little increase in the energy costs. Low-income population is likely to suffer most if energy bills are raised.

While the government is busy constructing coal-based power plants, it is going to impose carbon tax on fossil fuel corporations. The government is determined to construct Rampal and Orion Group's Khulna plants near the Sundarbans mangrove forest. Its stances on climate change and energy policy are apparently contradictory.

Sakib Imtiaz

Appeared in the Masters’ Degree

examination in Science in

Disaster Management,

Dept. of Geography and Environment,

University of Dhaka

[email protected]


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