Sustainability Trends: Implementation of Carbon Taxes - Essay Example

Sustainability Trends: Implementation of Carbon Taxes Introduction Everything that human beings needs for well-being and survival depends, either directly or indirectly on the natural environment. The main aim of sustainability is to ensure a conducible environmental condition were human beings could comfortably live. It also purports to improve public and economical standards for both existing and potential generation (Ramseur 65). The importance of sustainability is that we ensure that we have and continues to have all the basic resources required to protect our health and environment such as clean air, water, and raw materials. Due to the results of social, economical, and environmental consequences brought by emission of carbon gases, the government has decided to implement carbon tax policy. Carbon taxation is an effective means of reducing carbon emission. Carbon taxation also results to increase government revenue, employment, and growth. In addition, carbon taxation causes impacts to energy market. This paper aims at discussing the effectiveness of carbon taxation, and its impacts to government revenue and energy market. Background A carbon tax is a form of tax levied on the content of carbon fuels. It also refers to a type of carbon gas pricing. Due to industrial growth, most manufacturing companies are nowadays emitting large amounts of carbon dioxide to the environment, which negatively affects the life of both human beings and animals. Carbon exists in all types of hydrocarbon fuels, which people consume daily such as natural gas, petroleum, and coal and is emitted as carbon dioxide when human beings burn these hydrocarbon fuels (Maatta 31). On the contrary, non-combustion sources of energy such as sunlight, wind, nuclear, and hydroelectric power do not emit carbon dioxide. Carbon dioxide is a greenhouse gas that traps heat, hence causing global warming. Scientists continue to point out the side effects of emitting greenhouse gases into the atmosphere.Worldwide, human activities produces an approximation of 27 billion tones of these harmful gasesannually (Wilson 55). The only effective method the government should apply to reduce emission of carbon dioxide is by taxing the content of carbon released when people burn fossil fuels. This is a unique form of sustainability because apart from ensuring environmental sustainability, it also leads to an increase of government revenues hence improving living standards of citizens. Effectiveness of carbon taxation Carbon taxation offers a cost-effective approach to reduce emission of greenhouse gases. From an economical perspective, carbon taxation is a form of a Pigovian tax, which helps to address the issue of greenhouse gas emitters not experiencing the social/full cost of emitting such harmful gases. Although there are other sustainability measures of reducing carbon emission, carbon taxation according to many supporters seems more effective than any other mean.Bythis means, emitted greenhouse gas levels are capped and there is allocation of free pollution permits areauctioned (Malta 37). However, carbon taxation remains to be the most effective means of reducing carbon emission in the U.S.A. This is because cap policies to control carbon emission and giving trade permits to polluters will only add revenue to hedge funds and banks and allow usual business to chief pollutant industries. Implementation of carbon taxation will help in phasing off all coal-fire power posts that lack on-site carbon sequestration. Another reason why this paper supports carbon taxation over cap-and-trade is that employers will exactly know the cost they incurred due to the carbon they produce unlike grandfathered permits, which rewards the industries that emit large amounts of carbon and does least to reduce this emission. Therefore, carbon taxation approach to reduce greenhouse gas emission is more transparent, more direct, and a more effective approach than any other alternatives (Hsu 15). As we all saw in B.C., carbon taxation is relatively simple and quick to set. For instance, Canada’s sustainability process is taking many years to implement systematic sustainability standards, which are entirely inadequate. For instance, Canada’s coal-fired phase off took more than two years to be out of the announcement. In many people’s view, any sustainability policy addressing climate change in any country must make emissions of carbon extremely expensive and costly whereas, at the same juncture, giving energy efficiency and non-fossil fuels an advantage in the margin. Carbon taxation is fundamental since it does not only place an explicit and clear price on emissions when it comes changing producer, investor, and consumer behaviors (Wilson 59). Taxing polluters will make them feel the social and full cost they cause to the environment, hence influencing them to find a means of reducing emission of this harmful gas. Early evidence shows that, carbon taxation has been effective in reducing carbon emissions. This tax covers almost three-quarters of USA’s carbon pollution, hence reducing this emission at a higher rate. Carbon taxation will also lead to the growth of clean fuel production and technologies. This is because carbon tax would lead to an increase in the prices of carbon-intensive services and goods, and therefore, potentially rewarding the investment and innovation of renewable energy, carbon sequestration, energy efficiency, as well as other technologies. Some experts of energy recommend an increase in allocating funds to cater for cleanenergy development and research, which could be funded from revenues of carbon taxation (Maatta 39). Revenue, employment, and growth The amount of revenue a carbon taxpayer should raise depends on the tax level and how broad is its application. Various perspectives offer an explanation on how carbon tax policy will affect the country’s economy. Carbon taxation results in an increase of the price of fossil fuels. This cost increase encourages companies to switch from using the fossil fuel to the expensive clean fuels, hence reducing the percentage of carbon emission (Ramseur 65). Such factors will make country’s economy less dependent on pollutant fuels and less likely to face negative impacts due to energy prices. While carbon tax policy will decrease the growth of manufacturers that are the leading emitters of carbon dioxide, the tax will also boost growth of other industries such clean energy manufacturers (Hsu 17). Unfortunately, the carbon tax will reduce employment due to decreased demand of employees in carbon-intensive companies. However, the carbon tax will lead to economic improvement, if the government will use the accrued revenues in a manner that promotes growth of the economy such as reducing the deficit or cutting down other taxes. Therefore, all countries, especially the developed countries must implement carbon tax policy to ensure reduction of carbon dioxide emission (Malta 41). For instance, the implementation of this policy has brought a positive change in China. This is because implementing this policy will not only reduce the emission of carbon but also improve the economic status of the country due to the collected revenues. Impacts to energy market and its advantages Setting taxes on carbon emission will increase the price of fossil fuel, hence forcing many consumers to shift from using these carbon-intensive fuels to clean energies. Researches show that taxing 25% per ton on Carbon will add about 21% and 25% increase in the prices of gasoline and diesel respectively. Carbon taxation will also increase the price of other forms of energies such as electricity (1.2%), coal (40%), and natural gas (1%). Because U.S is the leading emitter of greenhouse gases that other countries, reducing its carbon emission will contribute to reduction of global emission (Ramseur 69). However, imposing this policy in one country may lead to an increment of carbon emission in another country, a phenomenon called carbon leakage.Therefore, it is essential for all countries’ governments to ensure implementation of carbon tax policy to ensure effective climate sustainability. Secondly, due to increased price of fossil fuels, its demand will decrease, thus forcing the fossil fuel manufacturer switch from manufacturing carbon-intensive fuels to clean energies (Maatta 44).The core benefits of carbon taxation are more essential. Increasingly, both carbon buyers and developers are nowadays recognizing the benefits of implementing a carbon tax that not only this policy reduces emission of greenhouse gases, but also improves quality of water and air, preserves and restore wildlife habitat, create job opportunities, and other advantageous economic impacts. It also encourages diverse and resilient landscape. This will force many industries to start using clean energies, which are less polluting. Conclusion In summary, the carbon tax implementation is a more effective trend in ensuring reduction of carbon gas emissions. In future, this policy is totally going to reduce the countrys carbon emission. However, in order to ensure effective implementation of carbon tax policy, this trend should be linked with other existing successful policies like lowering carbon technologies and improving energy efficiency. People should acknowledge that, reducing carbon emission by the use of carbon tax will is not painful. This sustainability policy also requires significant sacrifice from all countries to prevent carbon leakage. Substantially reducing consumption of fossil fuels will also change people’s lifestyles and fuel consumption behaviors.Implementing this taxation policy in all developed countries will highly help in reducing the effects of global heating, which causes negative effects to human beings and animals as well as plants (Hsu 65).If all countries will implement carbon tax policy, then carbon emissions and its side effects will remain as a theme of the past. Work cited Hsu, Shi-Ling.The Case for a Carbon Tax: Getting Past Our Hang-Ups to Effective Climate Policy. Washington, DC: Island Press, 2011.Internet resource. Maatta, Kalle. Environmental Taxes: An Introductory Analysis.Cheltenham, UK: Edward Elgar Publishing, 2006. Print. Ramseur, Jonathan L. Cap and Trade: The Kyoto Protocol, Greenhouse Gas (ghg) Emissions, Carbon Tax, Emission Allowances, Acid Rain So₂ Program, Ozone Transport Commission, Nox, Carbon Markets, and Climate Change. Alexandria, VA: TheCapitol.Net, 2010. Print. Wilson, Edward O. The Future of Life. New York: Vintage Books, 2003. Print. Read More