Environmental Concerns Of Carbon Finance Essay

The world economy is a very complex system; in the system harmful externalities disrupt capital flows and determine economic productivity. Most notable of these externalities is inadvertent global warming. Spending towards research and regulation of climate change at both the national and international level are very important in determining current and future business trends. Economists and scientists worldwide continuously debate the pros and cons of emissions reduction and what consequences can quickly follow. Though many have different views on the issue, all can agree that the immediate and long term effects of climate change have become an economic matter of paramount importance. The sweeping impact from climate change will have important fiscal, financial, and macroeconomic ramifications that influence global commerce standards.

(Kerin, Hartley, & Rudelius, 2010). These trends normally consist of five sources, social, economic, technological, competitive, and regulatory forces. My intention in this essay is to focus on one; the economic environmental force. I will discuss how the current state of the economy will impact completing an environmental scan. In order to evaluate how the economy will impact the completion of an environmental scan, it is essential to cover the concerns that affect the economic aspect whether people want to believe

The issue of carbon emissions is an important one not only from an environmental perspective but also an economic one. While reducing carbon emissions is an important one for the health of human beings as well as that of the environment, the larger question is what type of policy strategy is best for both reducing such emissions which might have an impact on efforts to mitigate the effects of pollution on climate change. While ther are options to consider which does not rely on economics-- technological or output standards achieved by command and control regulations--they are often fraught with political resistance by industry because they do not allow industry to make any choices or play a role in solving the problem of

Carbon taxing coal-based products, in a revenue-neutral way, will help discourage overuse of fossil fuels. The United States needs to reduce carbon emissions in order to avoid the costs that pollution and climate change inflict on the general economy and individuals. Carbon, unlike other commodities exchanged and consumed in the free market, bears unique costs to the general economy that its market price does not encompass. The pollution we create when we consume carbon contaminates our air, raises temperatures, and makes severe weather events more frequent. A carbon tax is an economic mechanism that forces actors in a free market to come face-to-face with the social cost of

The cap on the market is set on carbon emissions, creating scarcity within the market. At the end of each year businesses within the scheme are required to ensure they have enough allowances to account for their installation’s actual emissions. Those firms that do not comply and pollute without sufficient permits are hit with heavy fines. (Euro 100 per ton). The aim of carbon trading is to create a market in pollution permits and put a price on carbon. In this way, policy can help internalise external costs of firms’ production and encourage lower emissions to tackle climate change. In a cap and trade system, the volume permits would gradually decline and total emissions, in theory, will diminish. The model of such can be shown as

Cap and trade is a system aimed at diminishing the rate at which carbon is emitted into the atmosphere by creating an economic system based on meeting a certain minimal threshold or paying low-emitting companies for the right to emit in their place. For example, if company A only emits half of the emissions cap, that company can sell (or trade) the remaining credits to company B, should company B choose to emit one-and-a-half times the cap. A main objection to the cap and trade system is that it is not a strong enough means by which to curb emissions of fossil fuels and is inferior to specifically stronger carbon taxes. While initially appealing, the notion of simply strengthening carbon taxes fails to properly stifle carbon emissions and to adequately incentivize “green” development in comparison to the cap and trade system, preventing carbon taxes from occupying a central role to mitigate carbon emissions.

Another form of carbon credit trading applies to companies. If a company is having difficulties in sticking to maximum allowable emissions amount, it can use its resources to invest in an emission reduction project. This project will be one that produces carbon offsets, which he company may use to cover the amount that was they could previously not.

First we should understand how the carbon cap and trade system came about. The system of carbon cap trade used to be known as ‘emissions trading’, the alliance of free-market republicans and renegade environmentalists got the system adopted as national law in 1990 as a part of the Clean Air Act, to control the power-plant pollutants that cause acid rain, which is triggered by vast clouds of sulfur dioxide

The year 2016 was the warmest year on average in NASA’s 136 year record. One main reason this occurred is the increase in greenhouse gases. To reduce the amount of greenhouse gases in the air, the Canadian government has decided to implement a carbon tax as of 2018. (Canadian Press, 2017). A carbon tax is a “legal binding associated with harmful emissions charge.” (Maclean’s, 2016). Several provinces have already introduced a carbon tax, including British Columbia, Alberta, and Quebec. While British Columbia and Alberta have a carbon tax, Quebec uses a cap-and-trade system instead. The government believes it is important to avoid “economic damage caused by cross-country carbon price differentials.” (Maclean’s, 2016). That is why they are

In Australia, there is an emerging consensus that the government should take further actions to help mitigate and combat climate change. The current most accepted policy by government is the introduction of a carbon tax followed by an ETS in 2015. However we are focusing on the carbon tax in this essay and not the ETS. Here is a brief explanation of the dynamics of a carbon tax. A carbon tax is a tax on energy sources, which emit carbon dioxide (Co2). Therefore, carbon taxes address the problem of negative externality. Externalities are the subsequent effects when individual production or consumption of a particular good or service imposes costs or benefits on others. Therefore negative externalities are effects, which pose harm to others without their direct interaction (Basic Economics 2011). However, usual market practices and transactions do not reflect these cost and benefits in the prices involved in the transaction, or take into account in their transaction decision. Therefore this is a form of market failure. By imposing a cost on these negative externalities, the hidden cost can be addressed. Ultimately the purpose of a carbon tax is to reduce emissions of carbon dioxide and therefore reduce

In managing the emissions of GHGs(Green House Gases), carbon taxes will be imposed mid 2012. "Economic theory anticipates that with the increased costs of emitting GHGs, drives emitters to downsize their activities." Salem Press (2009)

They looked at two scenarios, inaction, where business’ continue finding and using carbon as they see fit, and action, where business’ use a low-carbon energy mix. They found that not only would the investment cost of the action scenario be no more than inaction, but it would even cost a bit less- 190.2 trillion dollars for action and 192 trillion dollars for inaction. This is before even considering the amount of money saved by the effects of the action scenario itself. The report found that, “the difference in climate damage costs between low (1.5°C) warming and high (4.5°C) warming scenarios could be as high as $50 trillion” (Business Insider). The effect of such a large economic company reporting this data is the perfect example of how using economics for the sake of reversing global warming can be really beneficial. The argument often used by economists is that becoming more sustainable would hurt the economy, but the data in this report proves just the opposite, and how terrible it would be if we did nothing. For the sake of investment in industry’s like coal and gas, this information is often denied. But this is not anywhere near the first time industry’s have had to adapt due to uncontrollable events. This report emphasizes the importance of recognizing

The system is supposed to enhance its internal practices to reducing greenhouse gas, and they will be increasing recycling processes. More importantly, it will also create strict guidelines for JPMorgan Chase's lending decisions when it comes to The mining, forestry, oil, and gas industries it will no longer finance projects that pose a danger to the environment It has also decided to encourage clients to design plans to try and reduce the large amounts of greenhouse gasses to help the environment. The modifications come from years of the hard word by the Stakeholders as well as some other groups that included nongovernmental organizations (NGOs), investors, and activists. Stakeholders, including NGOs, investors, and activists, as well as communities, labor, and consumers all, played a significant role in improving corporate behavior. Some NGOs are willing to put themselves in danger by using strategies of conflict. Others have been working to create partnerships with companies to help them green their production, often in ways that save them money. As well, the investor community is taking a progressively active role in work with the companies in the hopes of creating a partnerships with businesses in order to help them green their production, which often save them money on the long term outlook. Some of the investor community is taking an active role as well encouraging corporations to consider the long-term financial risks of social and environmental issues rather than the next quarter's

Should the U.S federal government adopt a carbon tax to decrease c02 emissions of public and private franchises.

Pollution, specifically global warming, is of growing concern to people and governments. It is a controversial issue whose validity is still being debated by scientists. The Kyoto Protocol is an international attempt to address global warming through emissions controls. Traditional neoclassical economic models do not incorporate pollution in rudimentary theories of supply, demand, or pricing, as a result, firms do not consider pollution as a cost of production, which leaves government regulation as the primary method for controlling these externalities. The goal of emissions trading is to allow one business, which can make greenhouse gas emission reductions for a relatively low cost, to sell