A new KPMG study said the global reach of carbon pricing and taxes would likely expand in the upcoming years, bringing a complex tax landscape that may prove challenging to navigate for some businesses. The findings, reported by BusinessGreen, were presented in a study titled “Business consequences of tax driving net zero ambitions” and prepared by KPMG’s Responsible Tax Projects.
The researchers at the consultancy giant argue that while carbon taxes can help speed up the net-zero transition, they may also create a complex tax landscape that varies based on location and different approaches. The report’s authors go on to say that carbon prices will possibly continue to rise despite global geopolitical and economic instability.
Carbon prices are at a record high in many jurisdictions, the study notes, and the price allowances in the EU are currently at €66 a tonne, after reaching nearly €100 in the summer. According to the report, this is a strong indicator that businesses should invest in clean tech and energy efficiency.
With only 4% of all emissions priced at a level sufficient to meet 2030 emission goals, the KPMG report says prices may increase. New carbon markets in China and emerging markets, as well as the EU’s proposal for new carbon border adjustment mechanisms (CBAM) further support this prediction.
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The new CBAM proposal may introduce tariffs on imports from countries that lack strong carbon pricing regimes, potentially driving more countries to adopt their own policies on CO2 pricing.
Some diplomats have alternatively proposed a “carbon club” that brings together countries with ambitious climate targets to advance decarbonization without the risk of a trade war.
The KPMG study says that businesses should be aware that the carbon tax landscape will likely become more complex and varied.
“Whatever approaches are decided, businesses in both developed and developing jurisdictions will be looking for certainty and measures which do not disrupt trade,” said Chris Morgan, head of the Global Responsible Tax Project at KPMG International. “Navigating this complex tax terrain is about negotiated settlements between different perspectives, attitudes, and interests.”
Read more: A Carbon Tax Among Biden’s Plans For Curbing Climate Change
KPMG and the other Big Four firms seldom solve problems. You can get a nincompoop who just graduated from high school or university doing some kind of audit work while his Manager is getting screwed by his Partner who is just a lazy crap and sometimes a sadist sitting in an office watching over his secretary’s boobs and sometimes playing golf with people he hopes to lure in as a client. That is essentially what a Big 4 is. However, a Big 4 firm may be a terrific location to work. If you survive the environment, you could turn out to be a genuinely tough person. If you don’t, you’re condemned for the rest of your life.