Carbon Dioxide Emission in Kuwait - Research Paper Example

Carbon dioxide emission in Kuwait Carbon dioxide is a naturally occurring compound. The atmospheric presence of carbon dioxide is in gaseous form. The gas' presence in the atmosphere is both advantageous and disadvantageous. The occurrence of the gas in the air is factored by multiple means. Carbon IV Oxide gas can be emitted as part of the products in the carbon cycle. The gas is also used and emitted by plants. The gas is used for photosynthesis although light is essential. The gas is produced by the decay of organic material, combustion of organic material and combustion of carbonic fuels and hydrocarbons (Harris and Roach, 383). Carbon dioxide environmental effects have significant interest. The primary source of carbon IV oxide is the atmospheric carbon IV oxide on earth. The concentration of the gas is regulated by photosynthetic organisms before the industrial error. Technological development in the agricultural field and the introduction of greenhouses as well has increased the need for the gas. Agrichemicals as well have increased the percentage of the gas in the atmosphere. Industrial revolution has increased the concentration of the gas in the atmosphere thus factoring global warming (Abdulai, A and Remkce, L. 15). Excess carbon IV oxide released in the air dissolves in the rainwater leading to acidic rainfall. Acidity in water bodies may cause death to organisms. The acidic water breaks the mineral components in the water bodies thus facilitating loss of some essential minerals to aquatic plants. The acid also breaks metallic components and may affect the respiration system of the marine animals and plants. Acid rain as well leads to corrosion of metal works and concrete building. The acid leads to first ageing of roofing iron sheets and buildings. The corrosion is facilitated by the reaction of acidic water and the metal component (Abdulai, A and Remkce, L. 20). Cement used to build a concrete structure is composed of minerals that react with the acid releasing salts that get eroded and thus the ageing of the buildings. Carbon IV Oxide is classified as a non-toxic gas and an asphyxiant gas. The classification is in accordance with the United Nations Economic Commission. The gas has some adverse effects on living organisms. According to their analysis, a concentration of up to 1% may cause drowsiness to some individuals. Further, a concentration of 7% to 10% may lead some people to suffocate even with sufficient oxygen presence characterized by headache, dizziness, hearing and visual. Carbon IV Oxide is heavier than air. Thus, high concentrated release of the gas from the ground in the absence of dispersing winds effects may cause suffocation to living organisms in the location. The gas collects in pocketed ground areas. The carcasses attract carrion feeders that as well are killed by the gas. In places near volcano mountains, children as well have been murdered as well (Saif, 10). Carbon IV Oxide is held responsible for both environmental and social problems like global warming. However, the pollution by carbon is an external externality. The cost is imposed by the whole society. An externality is a benefit or cost affecting a party who never had a choice to incur the benefit or cost. For example, a manufacturing company impose extra cost on health and clean-up to the whole society. The society is never involved in the decision-making. A neighbour of a given individual who decides to install fire-proof material in his home benefits by risk reduction of the spread of fire to their homes. Existence of voluntary exchange is mutually beneficial to the involved parties. However, additional effects can be caused to a third party. The effects caused by carbon IV oxide release can either be positive or negative. As per Neoclassical welfare economics, existence of externalities under plausible conditions will lead to outcomes not socially optimal. The group enjoying the benefits incurs no cost. The societal suffering external carbon cost do so involuntarily. For Example, a person driving a car’s cost is felt by the whole society. The above figure illustrates external costs and benefits that may be resulted to by the release of Carbon. Since carbon intensive companies lead to negative externality creation, the social production cost ends up being greater as compared to the private cost. In free markets, there is no consideration of the negative externalities in the price thus causing social inefficiency and overconsumption. Due to the ignorance of the external cost of carbon, there is a missing market (Harris and Roach, 490). The diagram shows negative externality welfare loss SMC = Social Marginal Cost (SMC is the total cost to society) | PMC = Private Marginal Cost (this is the private value to individual) | PMB = Private Marginal Benefit (this shows the benefit of individual) The graph illustrates the loss in welfare caused by the carbon overconsumption in the free market. The market has introduced carbon tax to internalise the externality. The carbon tax is imposed by the government. The tax imposed should equate the negative carbon externalities. The imposition results in a reduced market outcome up to the amount that is efficient. The effect is that, the government raises revenue thus reducing the distortionary amount of taxes that would be imposed elsewhere by the government. Carbon tax is of disadvantage as it doesn’t account for all regulations and transfers that are involved in the externalities. Tax does not take into consideration the private property (Saif 9) Imposition of the carbon tax may further be included in the end product’s price and added the private cost. The incorporation is similar to the polluters pay principle. The principle was incorporated into the international law. The integration happened in the 1992 Rio Summit. The law stands for the compensation of the full social caused by carbon emission to the environment by the parties that create it. In theory, the external cost should equal the tax. As a result, the customer's price consumers for s product will be in to cater for the social cost. As a consequence of the externality, the demand for the products will go down (Abdulai, A and Remkce, L. 25). Due to the reduction of demand, the marginal social benefit equals the marginal social cost. The graph shows the effect of the carbon tax on the supply curve. Carbon tax imposition leads to the supply curve shift from S1 to S2. The presence of the carbon tax may result in full social cost (SMC) being catered to the consumers. Carbon tax imposition should result in neutrality in revenue. Thus, tax by carbon emissions taxing is employed to reduce other government taxes. As a consequence, the overall tax burden should be reduced. The primary objective stands to be social efficiency increment by making people aware of the implication of full social costs (Saif 12). Encourages alternatives Carbon tax has a significant number of carbon taxes. The benefits include alternatives encouragement, revenue rise and socially efficient outcome. A high carbon emission price will encourage consumers and firms to develop and adopt more effective alternatives and engines to consume the emitted carbon. For example, to reduce the carbon tax, more solar power and hydrogen engines needs to be developed. The costs as well might encourage product consumers to walk or cycle to workplace. The step may facilitate health benefits and reduction in chances of getting an infection. Walking, cycling and more exercises may reduce risk chances of getting heart attack (Abdulai, A and Remkce, L. 46). Raises revenue The government's revenue gained from the carbon tax to subsidise alternative mean and sources. Some options such as green electricity may be employed. The income earned could as well be used for to repair the environmental damage as a result of pollution. Carbon tax is imposed by the government. The tax imposed should equate the negative carbon externalities. The imposition results in a reduced market outcome up to the amount that is efficient. The effect is that, the government raises revenue thus reducing the distortionary amount of taxes that would be imposed elsewhere by the government. Carbon tax is of disadvantage as it doesn’t account for all regulations and transfers that are involved in carbon externalities. Tax does not take into consideration the private property (Harris and Roach, 520). Carbon tax leads to the outcome that is socially efficient in the country of Kuwait. Carbon tax makes people pay expensively for the social cost and as well overcome the excess consumption. Carbon tax can as well have various problems. Net monetary effect determination of atmospheric Carbon IV Oxide rise is beyond the analyst’s scope. Government being the people’s representative pass laws to address externalities such as carbon pollution. The intervention takes the form of control and command or even environmental pricing reforms. Environmental pricing change is a private agreement between the involved parties. Traditional lifeways may also be employed to deal with the carbon external benefits and costs. Alternatively, democratic run communities as well can agree to cater and manage the external Benefits and expenses in an amicable way. Carbon externalities can as well be resolved by the involved parties (Saif 13). The government can easily hit its target in the reduction of carbon waste and pollutant effluent. The goal can be achieved by placing a responsibility on the parties involved in carbon emission. The government imposes fees, charges, as well as taxes to the parties involved in environmental carbon pollution. Most of the business firms target on profit maximisation and production cost minimisation. As a result, any extra charge coming to the activities that could be controlled encourages the management to curb it. Minimisation of the imposed cost can only be done by responsible excess carbon handling. As a result, the management will instead look for means of destroying the carbon IV oxide gas emitted as well as an economical means of utilising the gas. For example, a company, in which Carbon IV Oxide is eliminated, can capture the gas and use it in the manufacture of carbonic acid. The Acid can further be utilised in the manufacturing of Fertilizers. The gas as well can be used in the production of fire extinguishers. The paper thus encourages the state to hold the parties responsible so as to enhance personal responsibility on pollutants (Abdulai, A and Remkce, L. 17). Carbon dioxide emission in Kuwait and other GCC countries Kuwait has a high carbon IV oxide emission rate that results from fossil fuels' emission. The involved countries emit a gas of about 45% to 50% of the total carbon emitted in Arabs countries (Saif 9) Besides GCC States carbon dioxide emission rate, have exceeded the global emission rate. In 2003, Kuwait, Qatar, Bahrain and UAE were about 7, 9, 8 and 13 times more as compared to the world’s average respectively. In the same year, emissions by GCC amounted to around 254 million metric tons (Saif, 4). The data confirms the significant contribution by these countries to the climatic change and environmental pollution. Economic study of the period, 1998-2008 shows the high increase of revenues from crude oil in GCC countries. The hike has been well reflected in the years 2002-2008. The contribution to the overall revenue increased to 40% in 2006 from 30.8% in 2002. Public tax ratio in comparison to the oil industry revenue increased to 86% in 2006 from 77.4% in 2002 (Saif 6). To the contrary, a high rate of carbon dioxide emission increase has been experienced in the same period. The significant rise in the carbon IV oxide in Kuwait accompanied the high rate of GDP growth over the period. Thus, the country has a positive relationship between Carbon emission and economic growth. Most pollutant parts of the country are quarrying, mining and fuel extraction sectors. Manufacturing industry as well has facilitated the carbon dioxide emission by around 30% on average. The gas and electricity industry, that emits carbon IV oxide to the atmosphere, is the third sector of emission of the gas. Manufacturing and mining made level of emitted carbon IV oxide exceed the world’s rate of discharge in Kuwait and other GCC countries. Other economic sectors in Kuwait such as construction and agricultural sectors achieve a less pollutant value added percentages (Harris and Roach, 479). Kuwait has a rising per capita emission of carbon IV oxide reflecting the country’s effort failure in successful policies adoption to reduce the emission of carbon. However, the increase in per capita emission of carbon was less as compared to the increase reflected in the GDP raise. The country, therefore, has better motivations to the reinforcement of the environment as it has better levels of growth than the other GCC countries. High economic level achievement of economic rate of growth may cause the development of numerous processes to facilitate environmental regulations. The strict control of the environment should be directed towards the consumers, foreign investors and local producers especially in more polluting fields (Harris and Roach, 560). Power sectors and carbon dioxide emission in Kuwait Power companies are the largest carbon polluters sub-nationally, nationally and globally. In Kuwait, the total amount of carbon dioxide gas emitted if more than one-quarter of carbon emission. The emission is factored to by combustion of coal, natural gases and fuel in electric power production, as well as a source of power in other industrial sectors. The use coal and fossil fuels in energy production highly factor the level of carbon emission to the atmosphere. The initialization of manufacturing and processing industries is gradually increasing (Harris and Roach, 297). The industrial growth has increased the carbon fuel usage and thus an increase in Carbon IV Oxide gas emission. Vehicles as well produce a significantly high amount of carbon dioxide gas to the atmosphere. The emission is factored by the fact that, all locomotive machinery use fuel sourced from hydrocarbons. The fuel produces Carbon IV Oxide gas upon combustion to facilitate energy emission. In Kuwait, the number of vehicle ownership and usage has gradually increased as the country’s economy and welfare grows. The industrial sector should use more renewable sources of energies such as the wind and solar power. Renewable naturally occurring power sources are friendly to the environment, and thus less pollution will be experienced (Harris and Roach, 309). The adaptation of more friendly methods of power generation sources will lead to a reduction in the level of carbon emitted to the atmosphere thus reducing the level of pollution. Kuwait and other Arab countries have employed coal and fuel use in electricity generation. Use of the fuels has been factored by the cheap availability of fuel in the states. Managing a vehicle in Kuwait is cheaper as compared to other countries that import the fuel. The cost per unit of the fuels is affordable. To the contrary, the social cost as a result of carbon emission is highly expensive to the whole world. Thus, means to capture the emitted gas can also be employed in the states (Haris and Roach, 300).Power sectors and carbon dioxide emission Power companies are the largest carbon polluters sub-nationally, nationally and globally. In Kuwait, the total amount of carbon dioxide gas emitted if more than one-quarter of carbon emission. The emission is factored to by combustion of coal, natural gases and fuel in electric power production, as well as a source of power in other industrial sectors. The use coal and fossil fuels in energy production highly factor the level of carbon emission to the atmosphere. The initialization of manufacturing and processing industries is gradually increasing (Harris and Roach, 297). The industrial growth has increased the carbon fuel usage and thus more Carbon IV Oxide gas emission has increased. Vehicles as well produce a significantly high amount of carbon dioxide gas to the atmosphere. The emission is factored by the fact that, all locomotive machinery use fuel sourced from hydrocarbons. The fuel produces Carbon IV Oxide gas upon combustion to facilitate energy emission. In Kuwait, the number of vehicle ownership and usage has gradually increased as the country’s economy and welfare grows. The industrial sector should use more renewable sources of energies such as the wind and solar power. Renewable naturally occurring power sources are friendly to the environment, and thus less pollution will be experienced (Harris and Roach, 309). The adaptation of more friendly methods of power generation sources will lead to a reduction in the level of carbon emitted to the atmosphere thus reducing the level of pollution. Kuwait and other Arab countries have employed coal and fuel use in electricity generation. Use of the fuels has been factored by the cheap availability of fuel in the states. Managing a vehicle in Kuwait is cheaper as compared to other countries that import the fuel. The cost per unit of the fuels is affordable. To the contrary, the social cost as a result of carbon emission is highly expensive to the whole world. Thus, means to capture the emitted gas can also be employed in the states (Haris and Roach, 300). Carbon dioxide emissions and commodity Liberalization of trade in merchandise could lead environmental pollution as per the economic literatures. The argument takes the stage when the stage when the traded goods results in environmental contamination. The role remains to be subject to the economic policy position to reduce pollution towards the environment. In the case of Kuwait, economic policies may be installed to regulate the manufacturing and extractive sectors to lessen the carbon produced by the industries. Environmental protection should be the centre of pollutions reduction for any given state (Abdulai, A and Remkce, L. 7). Thus in the market of oil related commodities, the state should pay attention to the air pollution that could be caused by the products. Freedom of trade could as well lead to environmental protection by import liberalisation of capital goods a technology that is environmental friendly and advanced. Economic policies have significantly contributed to environmental maintenance. The policies encourage capital goods importation by replacing old technologies that are pollutant with more advanced techniques (Harris and Roach, 542). As per the economic and development needs of Kuwait, environmental pollution by capital goods should not be a reason to stop international trade of the commodities. Kuwait should thus activate the economic sector, as well as fully paying care concerning the environment to achieve a sustainable growth in the country’s economy. The target, to produce regulated pollution on imports, can be reached through incentive providence to the importers (Saif 9). The merchants encourage advanced technology commodity importation especially the technology used in the production. In Kuwait, imports of transportation and machinery equipment have a high importance of consideration as compared to other imports. The already manufactured goods come in the second position of the overall imports. The commodity’s effect depends on the type and size of the imports in subject (Abdulai, A and Remkce, L. 13). Foreign Direct Investment in relation to carbon dioxide emission The impact of Foreign Direct Investment (FDI) depends on the host country’s adopted policies as well as the foreign country in the question. The legislation of the country of Kuwait affects the relationship between the environment and the foreign investment. The country needs foreign investment as it provides capital funds to the upcoming entrepreneurs and also the an adequate asset base for the country. However, legislation by the government of Kuwait may negatively affect the attraction of the foreign investor (Sonia 2010). Kuwait would thus, be adversely affected by strict environmental legislation especially in the field of foreign investors. Additionally, Kuwait has become attractive to multinationals that have distinguished in the internal use of the low priced fuels. Foreign labour in the country is as well cheap and thus acts as a motivation for foreign companies. Foreign investors are attracted to the field of extraction and manufacturing. Some of the centre of commodities are steel, Aluminium and petrochemicals. The investments have significantly influenced the level of environmental pollution, as well as the countries’ GDP. In conclusion, carbon emission in Kuwait has been a continued challenge for the economic development. The externality has had both benefits and costs to the state’s population and development. Thus, the government should take some steps in making some legislative rules to regulate the industrial sector. References M. J, Harris, and Roach, B. Environmental and Natural Resource Economics. 3rd Ed ed. Routledge, Taylor & Francis Group,: Earthscan from Routledge, 2013. P. 470-584. Print. A, Abdulai,, and Remkce, L. The Impact of Trade and Economic Growth on the Environment: Revisiting the Cross-country Evidence. Vol. Working Paper No. 1491. Germany.: Kielinsttute for the World Economy, Germany, 2009. Print. Saif, Ibrahim. (2009). CARNEGIE Papers." The Oil Boom in the GCC Countries, 2002–2008: Old Challenges, Changing Dynamics. 1779 Massachusetts Avenue, NW, Washington, DC 20036: Carnegie Endowment for International Peace Publications Department, 2009. 4-16. Print. Read More