Australian Approach to Reducing Emissions - Case Study Example

Australian Approach on Reducing Emissions Name Institution Name Date Introduction Governments and institutions formulate and implement different policies focusing on aspects that affect the developmental and social objectives. Reducing emissions from fossil fuel is an integral component of the society and economic sector because of negative impact on the environment. The Australian government and international governments have formulated the Direct Action and Carbon Tax respectively to reduce emission. The aim of the essay is to discuss the motivation of implementation of these policies, comparing and contrasting carbon tax vs. direct action, picking the ‘best’ policy from the two, and proposing an alternative policy to reduce emissions. The main motivation of implementing these policies Climate change is a major issue in the business and social environments meaning implementing measures targeting climate sustainability is important. More industries are emerging, and businesses employ different strategies in ensuring profitability and competitive advantage. However, these companies and industries rely on fossil fuel for energy resulting in the emergence of greenhouse gases that affect the ozone layer (Bailey et al., 2012). The greenhouse reacts with the environment and atmosphere, which means that social and economic requirements are not fulfilled, or complications may occur. Moreover, the increasing number of industries and organizations means that there is a potential of increase in greenhouse gases and other emissions (Subramaniam et al., 2015). The increase of emissions affects the environment, and the solution is to implement measures ensuring the emissions are reduced (Meng, Siriwardana, and McNeill, 2013). Government and different entities have formulated and implemented different measures to reduce emissions such as the Direct Action and Carbon tax (Parliament of Australia, n.d). These policies have its strengths and weaknesses, but the goal is to protect the environment and society through reducing emissions. Carbon Tax vs. Direct Action A carbon tax or carbon pricing is a tax levied on the carbon emitted. Carbon is present in natural gas, petroleum, and coal and it is converted to carbon dioxide and other products when it is burned. A carbon tax offers economic and social benefits towards sustaining and protecting the environment (Bordigoni, Hita and Le Blanc, 2012). The carbon tax increases revenue while also advancing objectives and visions tied with climate change policy. The main objective of a carbon tax is reducing unfavorable and harmful levels of carbon dioxide emissions translating towards deceleration of climate change and wider negative effects on human health and environment (Bailey et al., 2012). The carbon tax takes the form of pollution tax that integrates subsidies and tradable pollution credits/permits. It means a price is set for any emission. On the other hand, Direct Action encourages management of emissions through the government providing funding to organizations to incentivize emission reduction activities (Parliament of Australia, n.d). The approach of Direct Action is government or other agencies allocating funds to companies for emissions reduction projects based on a process called reverse carbon auctions (Bordigoni, Hita and Le Blanc, 2012). It means that any organization aiming to reduce the amount of emissions target the government for incentives and support. Even though carbon tax and Direct Action takes different approaches, when is common is implementing a framework targeting reduction of carbon emissions. However, there are differences between the two policies. Carbon tax levies a fee on the use of fossil fuels, distribution and production depending on the amount of carbon that the fossil combustion emits (Bordigoni, Hita and Le Blanc, 2012). A government sets the amount of tax per ton and encourages businesses and companies to implement measures that can lower the amount of emissions. It is premised on the principle of negative externalities, and taxing ensures social and economic good (Subramaniam et al., 2015). However, Direct Action takes a comparatively different approach in which the government funds initiatives that target lowering emissions. The aim is not to attack the organizations polluting the environment but encourage businesses to implement policies targeting fewer emissions. It includes persuading businesses to embrace the use of renewable energy and other environmentally friendly practices. Therefore, carbon tax imposes levies while Direct Action offers incentives to mitigate environmental pollution. The best policy: Carbon tax Even though Direct Action has numerous initiatives on reducing carbon emissions and encouraging renewable energy, the ‘best’ policy is the carbon tax. The purpose of a carbon tax is encouraging businesses and individuals to implement practices that target reduction of emissions, which is different from Direct Action (Parliament of Australia, n.d). Direct Action funds the processes meaning an organization can institute measures, which would have been part of strategic objectives of an organization. For example in Direct Action, a company may decide to use public transportation which would have reduced the operational and overheads, but the organization uses to seek compensation or funding from the government (Subramaniam et al., 2015). However, in a carbon tax, a business formulates and implements measures ensuring carbon emission is minimized without the persuasion of any benefits from government or similar institutions. Since the aim of emission strategy is reduction meaning a measurable policy should be in place to quantify and qualify the policy (Bordigoni, Hita and Le Blanc, 2012). For example, the carbon tax provides predictability since carbon tax is stable and the business can internalize the carbon target since there is clear frameworks or policy approach (Bailey et al., 2012). Carbon tax can be viewed as a straightforward approach that can be employed for measuring the emissions against the expectations in addition to economic/financial variables. A carbon tax is also important in that is a cheaper approach, and it can be tied with other strategic approaches. Reducing emissions is one thing and using the benefits of a carbon tax to foster other sectors is important (Subramaniam et al., 2015). For example, the proceeds of a carbon tax can be used to fund research and development strategies resulting in the creation of new approaches to energy and sustainability requirements (McGuirk, Dowling and Bulkeley, 2014). It means the government and society benefits rather than the public funding the policies compared with the Direct Action (Parliament of Australia, n.d). Carbon tax policy is crucial since it offers organizations and industries guidelines in reducing carbon and also permitted options to utilize more fossil based energy provided they meet the penalties (McGuirk, Dowling and Bulkeley, 2014). It indicates it is a two-way approach in which exceeding the allowed limits affects the business process and the stakeholders can query against sustainability reports (Subramaniam et al., 2015). For example, if an organization states that it progresses towards reducing emissions, then why the reasons of increasing carbon tax in terms of indicating in the financial reports such as expenses. If the argument of an organization is championing sustainability, these information should be indicated and used to advance corporate social responsibility. An alternative policy to the Carbon Tax and Direct Action Plan, the government, could employ to reduce emissions The aim of any policy that can be implemented is reducing emissions (Subramaniam et al., 2015). Any strategic action and plan in terms of policy formulation and implementation have to consider its impact on numerous stakeholders such as the activities, government, businesses persons, organizations, society and the employees (Elliott and Fullerton, 2014). The proposed policy should consider the impact of the policy on business development and the creation of employment opportunity. It should define the limits of the policy and how the policy can spur economic development contributing to increase in employment opportunities (Bailey et al., 2012). For example, while the alternative acknowledges the problems of fossil energy the policy can encourage the development of renewable energy whereby opportunities lost in the fossil energy is recovered from the renewable energy (Crowley, 2013). It results in a win-win strategy whereby the emissions are reduced while economic and employment opportunities are created. The alternative framework should also focus on the role of different businesses in funding the policy rather than the government or public (McGuirk, Dowling and Bulkeley, 2014). The Direction Action, for example, is funded by the government in which the government should have used the resources to foster other social developmental objectives (Parliament of Australia, n.d). It means a framework similar to carbon tax can be implemented whereby the companies and industries are penalized based on the amount of the emissions, and these penalties used to support the alternative framework (Bordigoni, Hita and Le Blanc, 2012). It results in organizations and industries emitting emissions are tasked with funding the policy to reduce the emissions. The alternative policy should also analyze and review the transition framework (Subramaniam et al., 2015). It is a challenge for a business to automatically stop emissions or embracement of renewable energy meaning a transition platform should be in place. For example, since the fossil energy is dangerous and industries are transiting to renewable energy, a new policy such as using gas as a substitute for the short term can suffice (Bailey et al., 2012). Therefore, the alternative policy should not only analyze the outcome but should also consider the phases and levels the new policy has to follow. Additionally, the alternative policy has to consider the role of other agencies and institutions. The framing and design of the alternative policy should consider the impacts and requirements of international frameworks (McGuirk, Dowling and Bulkeley, 2014). For example, European Union has its policies; California State in America has its policies, meaning these numerous policies have to be considered in design Australian policy towards reducing emissions (Beck et al., 2015). Variables of globalization and industrialization of businesses and organizations mean any policy formulated to address emission should take a global perspective (Bordigoni, Hita and Le Blanc, 2012). Constructing the policy to Australian or focusing only on Australian values results in conflict and misunderstandings with international framework. Therefore, a collaborative and cooperative framework has to be instituted that considers numerous impacts of any policy (Subramaniam et al., 2015). Each stakeholder have to contribute, and the impacts of the policy on individual stakeholder have to be analyzed and effective framework that champions the rights of different stakeholders implemented (Ploeg and Withagen, 2014). It also has to incorporate the transitional objectives including creating a system that allows inclusion of other processes such as technological advancement (Bailey et al., 2012). The policy should be “living” in that it metamorphosis has the changes occurs, and the impact of these changes towards the wider sustainability and reduction of emissions. Conclusion In conclusion, the climatic changes and increasing emissions have forced different governments and institutions to implement policies to address emissions and related complications. Some of these policies include the carbon tax and direct action. A carbon tax is a tax levied based on the amount of emissions while direct action defines the role of government in funding activities and programs targeted towards embracing sustainability measures to reduce emissions and focus on fossil fuels. Both of these policies targets reduction of emissions but the approach and entire ideology is different. Carbon tax is premised on taxing while the Direct Action is allowing the government to fund and encourage the reduction of emissions through supporting renewable energy and encouraging companies/businesses to implement measures targeting reducing emissions. These two policies are an ineffective meaning alternative approach that brings together different stakeholders, employs a collaborative framework, balancing the strengths and weaknesses of these two policies and ensuring negative impacts to different stakeholders are minimized. References Bailey, I., MacGill, I., Passey, R. and Compston, H., 2012. The fall (and rise) of carbon pricing in Australia: a political strategy analysis of the carbon pollution reduction scheme. Environmental Politics, vol. 21, vol. 5, pp. 691-711. Beck, M., Rivers, N., Wigle, R. and Yonezawa, H., 2015. Carbon tax and revenue recycling: Impacts on households in British Columbia. Resource and Energy Economics, vol. 41, pp. 40-69. Bordigoni, M., Hita, A. and Le Blanc, G., 2012. Role of embodied energy in the European manufacturing industry: Application to short-term impacts of a carbon tax. Energy Policy, vol. 43, pp. 335-350. Crowley, K., 2013. Irresistible force? Achieving carbon pricing in Australia. Australian Journal of Politics & History, vol. 59, no. 3, pp. 368-381. Elliott, J. and Fullerton, D., 2014. Can a unilateral carbon tax reduce emissions elsewhere?. Resource and Energy Economics, vol. 36, no. 1, pp. 6-21. McGuirk, P., Dowling, R. and Bulkeley, H., 2014. Repositioning urban governments? Energy efficiency and Australia’s changing climate and energy governance regimes. Urban Studies, vol. 51, no. 13, pp. 2717-2734. Meng, S., Siriwardana, M. and McNeill, J., 2013. The environmental and economic impact of the carbon tax in Australia. Environmental and Resource Economics, pp. 1-20. Parliament of Australia. (n.d). Chapter 5: Direct Action Plan. Retrieved from http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Environment_and_Communications/Direct_Action_Plan/Report/c05 Ploeg, F. and Withagen, C., 2014. Growth, renewables, and the optimal carbon tax. International Economic Review, vol. 55, no. 1, pp. 283-311. Subramaniam, N., Wahyuni, D., Cooper, B.J., Leung, P. and Wines, G., 2015. Integration of carbon risks and opportunities in enterprise risk management systems: evidence from Australian firms. Journal of Cleaner Production, vol. 96, pp. 407-417. Read More