The Cost Of A Carbon Tax Or Cap And Trade System

1161 Words Dec 3rd, 2015 5 Pages
Another implication with the imposition of a carbon tax or cap and trade system is that depending on the industry specialization of the country, it can result in primarily hurting the industries that are key actors in the local economy. Hence, at times, it is difficult for industries to promote clean energy at a reasonable time to internalize the extra cost imposed on them through a carbon tax policy. For instance, the Conservative government in Canada had opposed carbon pricing, arguing that it would hurt economic growth, especially in the oil sector. In addition, they argued that a carbon pricing policy would not achieve its intended goals because other countries are not willing to impose the same standard on their industries, resulting in hurting Canadian businesses in trade.

However, experts argue that the cost of a carbon price policy has ambiguous effect on the competitiveness of the industries. Indeed, taking into account the benefits a carbon pricing policy can bring - promoting cleaner environment and innovation of clean technology, overall society as a whole gains as a result of applying carbon pricing policy. Proponents of a carbon argue a carbon price policy argue that a carbon pricing policy is the most efficient methods of internalizing negative externality. In addition, environmentalists argue that a carbon pricing policy is a necessity for a long term sustainable growth. Hence, for those who promote carbon pricing, the policy is seen as a long term…

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