How would a world carbon tax work?
Short Answer : Just like GST/VAT, but worse.
Why is it worse, easy. GST is set at fixed rate by the NZ Government. The carbon rate would be set based on a valuation of carbon emissions of each and every individual activity, the rate would sensitive to fluctuations in valuation. The valuation of the rate would be very contentious. Don’t believe me consider the current rates applied to ACC activities.
For example if the NZ Govt set the carbon tax on cars at 2%, but the World Carbon Council said that it was too low, and insisted that it be raised to 5%, and if NZ failed to do so our export products would downgraded from AAA to -AAA ( just like credit agencies). This would have a negative price effect upon our export value. This is how the ‘World Carbon Council’ would enforce its international carbon tax agreement. This unelected body would be all powerful and have the ability to crush the living standard of many NZders.. Do you think this country leadership see this eventuality, do you think Greenpeace cares about you..of course not !
A carbon debit activity would seek a carbon credit activity to offset it, and after the summation of the total carbon activity you would see the deficit (debit) or the surplus (credit) be exchange with another party of the opposite account.