Write about how the Carbon Tax is the Best Solution for Climate Change
Thesis Statement: Carbon tax is the best way to combat climate change
Carbon tax refers to a form of fee that is assessed for pollutants that contribute to greenhouse gas pollution.
This tax is mostly due to the use of fossil fuels.
They are charged a monetary price to help reduce global warming.
Carbon dioxide, one of the main green house gases responsible for numerous environmental problems, is one of them.
Carbon tax is a strategy that applies carbon pricing to impose a tax at a fixed rate for every ton carbon dioxide emitted to the environment.
You can also impose taxes on all sources of fossil fuels according to the amount of carbon in them.
To improve the environment and prevent further damage, carbon taxes are imposed.
The environmental effects of carbon dioxide have been severe.
To prevent any further environmental harm, researchers have determined a monetary value to the carbon dioxide emissions.
Carbon tax is an attempt to limit carbon dioxide’s emissions in the atmosphere. It does this by pricing carbon and protecting the environment from further damage.
Implementing the carbon tax policy was not without its problems.
Carbon tax represents almost 85% worldwide energy consumption.
The fossil fuels account for around 85% of all energy.
Although only 15% of energy comes primarily from fossil fuels, the remaining 15% is generated by hydro power, nuclear energy, biofuels and solar energy. However, there are very few places where it is possible to build dams for hydro electricity generation. The nuclear plants also face many political problems.
Vera & Sauma (2015) argued that carbon taxes may encourage the development of both hydropower and nuclear power.
By using carbon tax revenue, the government could increase its investment in green electricity generation.
This would reduce environmental damage and encourage the use of renewable energy sources.
A few scholars believe that focusing more on the benefit certainty aspect is necessary, as it emphasizes the environmental rather than the economic aspects (Ploeg & Withagen (2014)).
The implementation of a carbon tax will, for instance, encourage the development and use of renewable resources such solar energy, wind energy and hydrogen engines.
While carbon tax may have some negative impacts, evidence is not sufficient to support this.
Given the rapid climate change and growing acceptance of carbon tax, it seems that carbon tax must be implemented globally.
The implementation of carbon tax should encourage other firms to explore alternative options.
According to Hoberg & Meadowcroft (2015), carbon tax has been shown to reduce greenhouse gas emissions by as much as 15%.
In terms of economics, this tax may discourage producers from producing in the same country due to the higher cost.
Parry (2015) says that this might encourage producers to move to another country with lower carbon taxes.
The economy may be affected if the producers move.
This could encourage firms to hide their true carbon emissions from the government (Martin De Preux & Wagner (2014)).
Carbon tax implementation has also resulted in a shift from carbon-intensive businesses to information and service industries.
The cost of goods and services would rise due to carbon tax. This is because production costs will tend to increase.
This price increase would result in a decrease in the purchasing power of households, and consequently, a reduction in their real wages.
It seems that the idea of offering a rebate on other taxes due to implementation carbon tax seems ambiguous. After a tax is imposed, they cannot be removed.
Some argue for tax swaps to reduce income tax to implement carbon taxes.
While it might sound appealing on paper, it is not practical.
The cap-and-trade policy makes it easy to track carbon emissions in an environment (Goulder & Schein 2013).
Murray, Pizer, & Reichert (2016) argue that the implementation carbon tax is more effective because it allows government to generate revenues that can then be used in the development of alternative methods to address the damage caused by carbon emissions.
In the example of revenue from carbon tax, it has allowed the government to reduce deficits which will lower the total cost to the economy (Rezai & Van der Ploeg (2016)).
This could have long-term benefits for the economy.
This revenue could even be used to encourage the government’s decision to reduce marginal tax rates.
This would allow the government help select groups most directly affected by taxes.
This could help to achieve equilibrium in the economy.
Many economists agree that falling emissions can lead to stability in the economy.
McClay and Elgie compared Canada’s per-capita fuel use, green house gas emissions and gross domestic product (Elgie & McClay 2013).
After four years of implementation, the fuel consumption saw a sharp decline of 19%.
However, carbon tax is a burden on households and can be used to reduce greenhouse gas emissions.
But, carbon tax policy works better than the cap & trade policy. Under the cap & trade policy, government often issues pollution credits to heavy industry.
This shows the superiority of carbon tax policy over cap and trade.
The government can reduce taxes with the policy of tax swaps thanks to carbon tax.
The carbon tax can reduce the income tax rates by generating revenue.
The carbon tax can also help pay the federal debt.
These revenues could also be used for a lump sum payment of dividends to households.
The carbon tax’s revenue can be used for research and development of renewable energy sources.
The carbon tax can have a significant impact on the country’s economy.
The carbon tax policy has the potential to reduce carbon emissions.
The government can make a carbon tax to generate revenue that it can use for environmental repairs and prevention of further damage.
Implementation of the carbon tax will require firms to reduce their carbon emission and use more renewable sources.
The social cost of carbon intensive industries is greater than its private costs because it creates a negative externality.
Weitzman (2014) states that the primary objective of carbon taxes is to internalize externalities.
This is because the person who causes harm to the environment shall have to pay the social cost of his activities.
In order to make taxation less burdensome, rebates must also be given on other taxes.
It is not easy to implement carbon tax. However, this tax can help lower carbon emissions and prevent further damage. This will lead to sustainable economic development.
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