Carbon tax on energy, fertiliser to ease urea subsidy burden, says study

Researchers from IIT Bombay and the Monash University , Australia, who studied the impact of increasing natural gas consumption on the economy and environment in India, have suggested that the country must implement a carbon tax on power plants, fertilizer industry and consumers for releasing carbon dioxide, while encouraging the use of natural gas.

While the researchers said the government should induct natural gas – a cleaner fuel with low emission of particulate matter, ash and greenhouse gases – in the fuel market, they have suggested that the carbon tax should be levied so that urea (produced from natural gas) subsidies given to the fertilizer sector do not burden the economy and are recovered by the government by up to 44 percent through the carbon tax.