Should the US Act Alone to Trade Carbon Cap - Essay Example

Dong Dr. Dale Ward ATMO336 3/12 Should the US enact carbon cap and trade alone or should wewait for the rest of the world to enact similar carbon reduction policy? Introduction Carbon cap is a mandatory cap that is imposed upon the CO2 emissions into the environment. This concept is associated with preserving the environment and economic operations of firms. Since CO2 is attributed to the global warming and other possible harmful climatic changes, Carbon cap seeks to provide economically feasible strategies of reducing the greenhouse gasses by regulating their emissions. Carbon cap is aimed at imposing a limit to the amount of carbon emission and taking substantive steps to ensure that it is up to an acceptable limit. This concept has been viewed with equal measures of apprehension and appreciation in the US since its proposal by the US House of Representatives in 2009. With the debate ensuing regarding the US taking the first step towards environment protection and its possible implications on global impact, economic growth and possible trend setting role, there are many angles to study this concept from. This paper is aimed at highlighting the various aspects of imposing a carbon cap in the US, its pros and cons and the feasibility of taking such step in the long and short term. It is not a new fact that the pollutants that are exhausted into the atmosphere as a result of industrial activities damage and human activities cause climatic changes and other greenhouse effects. Carbon dioxide is the leading greenhouse gas and comes not only from industrial operations and human activities like burning of fossil fuels and in energy but also from some other natural sources such as animal respiration, volcanic eruptions and decay of plants. The accumulation of large amount of carbon dioxide from the diverse sources in the atmosphere results into catastrophic impacts of climate change in the environment. To tackle climatic changes and the negativities that emerge as a result of pollutants, it has become imperative for countries to strive on their level to minimize their contribution towards environmental harm. Carbon Cap is one such concept that has emerged as a result of this changing trend towards environment friendliness. It basically restricts the extent of carbon emissions into the atmosphere and exceeding the prescribed limit makes the operating firm liable to pay a carbon tax (Shapiro, 2007). Carbon cap and trade is an approach to curb environmental destruction by greenhouse gases. This approach is environmentally and economically feasible and practical which is centrally driven by global warming. “Cap” and “trade” terms imply setting limits for greenhouse emissions and creation of a market that allows for companies to make innovations which help them emit less greenhouse gases by falling under the prescribed limits of the emissions and enhance business operations by minimizing harmful waste. The question that arose as a debate regarding carbon cap has been whether the cap should be imposed in the US or not. There are two sides to these arguments, for and against. Pros: It will help reduce the pollution and levy penalty on companies that exceed the permissible limit of harmful emissions. Limited pollution can be determined through trading of allowances for pollution by companies, and the entities will strive to bring their operations in alliance with the permitted limits of these allowances. Companies will take this challenge as an opportunity and try to innovate some measures that allow pollution cuts and energy conservation, making businesses more competitive as these can result as revenues in the long run (Johansson, 2000). The United States is one of the most powerful countries in the world. It would not be wrong to say that many countries look up to the US for its policy formulation and often mirror the actions taken by the American government. The US could be playing its role as a world leader in making the first substantial move towards carbon capping and protecting the environment. Furthermore, it may play the role of a trend setter and initiate a series of similar steps taken by other countries in the world. Cons: There are several concerns about the actual impacts of imposing such a measure. According to the Senator of Iowa, Charles Grassley, on an interview on June 28, 2009, on This Week with George Stephanopoulos, he argued that if the United States did move towards imposing the carbon cap, they were most likely to reduce CO2 emissions by less than 1 percent in the next 30-40 years (Grassley, 2009). This is a minute impact that will result in the imposition of such a carbon cap. There are apprehensions regarding the skeptical entities that will move their operations to countries that do not levy carbon caps. This will draw out the investment from the country and give advantage to other countries of the world. The economic health of the country may be impacted and hence, this might prove too costly for the country. The insignificant amount of impact a carbon cap weakens the feasibility of this measure as the US contributes less than 25% towards the overall pollution worldwide. Thus, if the other countries do not follow suit, the US will be on the losing side. Conclusion Keeping the pros and cons in our view, it can be said that the extent of impact that carbon caps can make in the US is fairly small. However, it is likely that other countries also commit themselves to environmental protection and make carbon caps a necessity and not an option. Since the climatic changes are worsening every year and people are becoming more concerned about the environment protection and use of goods that positively impact the environment, there is a chance that saving nature and our environment will become a global priority for many countries. With China and India being the main industrial hubs and chief contributors towards global pollution, the proposed solution to this problem is to persuade these countries to impose carbon caps or emission ceiling in order to minimize the negative impacts that they have on the environment. The US should set an example for the rest of the world by demonstrating the imposing of Carbon cap. Also, Time bound strategies can be planned and proposed to these countries, in order to enable enterprises to realistically modify their operations over time. A widespread communication campaign should be run in order to create awareness and market for environment friendly goods that contribute towards a positive means to achieve environment preservation. Work cited Bengt Johansson, Economic Instruments in Practice 1: Carbon Tax in Sweden, Stockholm, Sweden: Swedish Environmental Protection Agency, 2000. Charles Grassley , “If the United States moves ahead by itself (on cap-and-trade)... after 30 or 40 years, were going to reduce CO2 by less than 1 percent." Interview on ‘This Week with George Stephanopoulos’ June 28th, 2009. Robert Shapiro, Addressing the Risks of Climate Change: The Environmental Effectiveness and Economic Efficiency of Emissions Caps and Tradable Permits, Compared to Carbon Taxes, The American Consumer Institute, 2007. Read More