Equivalence Carbon Taxes Emissions Trading -Myassignmenthelp.Com

Question: Discuss About The Equivalence Carbon Taxes Emissions Trading? Answer: Introduction: Carbon tax is levied on certain fossil fuels such as coal, oil and natural gas. The main objective of the tax is to protect our society from carbon ignition[1]. It is scientifically proved that excessive emission of Carbon Di Oxide caused serious damage to the climate and this tax compels the users of the fuel to pay for all the damages. It also motivates the users to move to non-carbon fuels. Discussion: The main driving force of the fossil fuel is carbon and hydrogen. When the energies are being used, Carbon Di Oxide emitted from it and that caused dangerous impacts on the atmosphere[2]. Most of the CO2 are emitted from the coal and carbon tax helps to restrict the excessive usage of CO2. Carbon tax helps the carbon fuel users to restrict excessive use of carbon fuels. It also helps to fuel the economy by increasing the revenue criteria of the carbon fuel. The nature of the tax can either be Pigovian or regressive. In most of the OECD countries, carbon taxes are levied indirectly. It can be observed that the taxes are levied on the motor cars and energy products. The main reason of global warming is excessive use of Carbon Di Oxide[3]. From the theory of Economics, carbon tax is sort of pollution tax and act as a price instrument which is imposed on the Carbon emission. The nature of the tax is of negative externality and therefore, known as pigovian tax which is equal to the margin al damage cost. Besides the economical impacts, carbon taxes have certain social cost which had been established for the first time in Reagan administration in the year 1981[4]. Limitation on the emission of carbon has been fixed by the government and the international environment protection authority, and in case of excessive emission, the tax has been imposed on the reason with an intention to curb the environmental disaster. The social cost of carbon is based on Integrated Assessment Model that works for calculating the effect of carbon on climate change. Further the monetary damage regarding the climate pollution has been calculated by the model. The SCC figure computed in 2015 is $31.2 per ton of CO2 for emissions, this quantity will rise 3% in real terms, to account for price increases till 2050. Estimates of the dollar cost of carbon dioxide pollution is given per tonne, either carbon, $X/tC, or carbon dioxide, $X/tCO2. One tC is roughly equivalent to 3.7 tCO2 (total Carbon D i Oxide). In Australia, carbon tax was imposed during the period of Gillard Labour Government and the term was included under the provision of Clean Energy Act 2011[5]. However, in 2014, the Act was repealed and Emission Reduction Fund has been established in the year 2014. In Australia, clean energy future plan is objected to reduce the effect of greenhouse gas and carbon pricing is a part of it. The main aim of this policy is to limit the emission of the gas below 5% by 2020 and 80% by 2050 and improve the energy efficiency ("Carbon Taxes Parliament Of Australia"). Considering its importance, the Australian government had announced the plan as a part of the trading scheme in 2014. Conclusion: To sum up, it can be stated that carbon tax is a medium to curb the negative impact of carbon emission on the nature. It has certain economical and social impacts. The tax rates are quite helpful to the budget system and a price signal regarding market response has been sent by this. References "Carbon Taxes Parliament Of Australia."Aph.gov.au. N.p., 2018. Web. 3 Feb. 2018. Aghion, Philippe, et al. "Carbon taxes, path dependency, and directed technical change: Evidence from the auto industry."Journal of Political Economy124.1 (2016): 1-51. Baranzini, Andrea, and Stefano Carattini. "Effectiveness, earmarking and labeling: testing the acceptability of carbon taxes with survey data."Environmental Economics and Policy Studies19.1 (2017): 197-227. Chiu, Fan-Ping, et al. "The energy price equivalence of carbon taxes and emissions tradingTheory and evidence."Applied energy160 (2015): 164-171. Dissou, Yazid, and Muhammad Shahid Siddiqui. "Can carbon taxes be progressive?."Energy Economics42 (2014): 88-100. Lenzen, Manfred, Arunima Malik, and Barney Foran. "Reply to Schandl et al., 2016, JCLEPRO and Hatfield-Dodds et al., 2015, Nature: How challenging is decoupling for Australia?: Reply to: Schandl H., Hatfield-Dodds S., Wiedmann T., Geschke A., Cai Y., West J., Newth D., Baynes T., Lenzen M. and Owen A.(2016). Decoupling global environmental pressure and economic growth: scenarios for energy use, materials use and carbon emissions. Journal of Cleaner Production 132: 4556; Hatfield-Dodds S., H. Schandl, PD Adams, TM Baynes, TS Brinsmead, BA Bryan, FH ...."Journal of Cleaner Production139 (2016): 796-79