Carbon tax: What is it and why is it important to face climate change?
Updated: Jun 22, 2021
October 26, 2020. The carbon tax was established in 2016 as a response to the commitments made in the Paris Agreement, a pact in which 195 countries agreed to reduce Greenhouse Gas (GHG) emissions through the mitigation, adaptation and resilience.
Colombia joined this mission by setting the goal of reducing GHG emissions by 20% by 2030; and through article 221 of Law 1819 of 2016 made the carbon tax effective to promote this objective, which seeks:
Reduce the demand for fossil fuels, the vast majority of which are consumed by large industries.
Encourage forestry and energy transition projects through their non-causation.
Raise the necessary funds to implement actions that strengthen the National System of National Natural Parks, confront coastal erosion and deforestation, and promote activities with a focus on peace with sustainability.
How does it work?
This tax is paid from January 1, 2017. All users of liquid fuels must pay this tax. Distributors must pay their supplier the tax and this, in turn, must transfer it to the National Tax and Customs Directorate (DIAN). Other citizens, that is, those who buy hydrocarbons from distributors, pay it as an additional value in the price.
What is its importance?
The carbon tax has become an important economic instrument for reducing CO2 emissions, protecting forests and species of flora and fauna, as well as improving the quality of life of communities. (See: REDD + projects: source of resources to promote territorial ethnic plans)
With decree 926, issued in 2017, taxpayers within the tax have the possibility of resorting to the figure of non-accrual through the purchase of emission reduction certificates. The end user or consumer can seek GHG emission reductions or removals through conservation projects within or outside their organization.
This compensation alternative has opened the doors to socio-environmental projects that allow the conservation of countless hectares of native forests and be a means of financing to improve the quality of life of various communities in Colombia.
Type of projects
BIOFIX is one of the expert companies in the country in structuring and executing nature-based solutions. One of its most important lines of work is the development of REDD + Projects (Reduction of Emissions from Deforestation and Forest Degradation).
By 2020, the company has structured 7 projects under this mechanism, through which it seeks to conserve about 993,724 hectares of humid and very humid tropical forests in Colombia, benefit 11,826 Afro-Colombian and indigenous ethnic families, and issue about 12 ' 000,000 GHG emission reduction certificates.
“Carbon credits represent a significant source of climate finance. Through the sale of carbon credits, the collective councils and indigenous reservations receive resources to: strengthen their governance, design and implement green businesses, monitor deforestation and reforestation, and facilitate access to improved housing and health. Currently there are more than 20 councils that are part of this financing mechanism ”, says Ana Milena Plata Fajardo, Manager of BIOFIX.
In the future, it is expected that more conservation projects will be implemented in different areas of Colombia, in order to contribute to the emission compensation that by law must be fulfilled by companies, as well as to improve the quality of life of thousands of people throughout the territory and the protection of hundreds of species of flora and fauna.
How to link to these initiatives?
If you are the owner of properties with forest cover and want to obtain financial incentives to finance your activities, you can click on the following form and we will contact you: https://www.biofix.co/contactanos
If you are a company subject to carbon tax and you want to reduce your costs by not accruing the tax with carbon credits, you can click on the following form and we will contact you: https://www.biofix.co/contactanos