Meeting the Paris Agreement commitments
The Paris Agreement, which all Commonwealth member countries have ratified, commits signatories to limit global warming to 1.5°C above pre-industrial levels.
Signatories to the Paris Agreement are required to submit nationally determined contributions every five years containing mitigation commitments for the reduction of greenhouse gas emissions. To meet these commitments, Commonwealth member countries may wish to put in place carefully considered legal frameworks and policies to reduce their emissions and limit climate change.
Enabling the transition from fossil fuels to clean energy alternatives
The model law is consistent with the key principles of international environmental law, including the ‘polluter-pays’ principle. The individual parts and sections of the model law have been drafted to ensure clarity around the legal obligations and rules, and to ensure transparency and procedural fairness in carbon taxation.
This model law serves as a starting point for Commonwealth countries to develop new legislation or modify existing statutes accordingly.
Key design features of the carbon tax:
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It is likely to cover most emissions in most jurisdictions
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It minimises the costs of tax administration by levying the tax upstream on fossil fuel companies and large industrial emitters
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It has strong provisions for measuring the impact of the carbon tax and ensuring a just transition
Investing in renewable energy sources such as solar, wind, and hydroelectric power creates jobs across various sectors, from manufacturing and installation to maintenance and research.
The demand for carbon taxation is growing as countries strive to achieve their global commitments, increase domestic revenues, and avoid carbon border adjustment mechanism on their exports. The Commonwealth Carbon Tax Model Law is designed to provide countries with a tool for implementing carbon tax that is comprehensive, easy to administer and consistent with a just transition.
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 Commonwealth countries, as they seek to avoid the worst effects of climate change and introduce policies for a more sustainable and prosperous common future.
The Commonwealth Secretary-General, the Rt Hon Patricia Scotland KC