There Has Been Confusion About What A Carbon Tax Is And

Stewart Elgie, a University of Ottawa law and economics professor and chair of the green economy think-tank Sustainable Prosperity suggests that British Columbia’s per-capita fuel usage had fallen more than 4 per cent compared with the rest of Canada and its economy (Ebner, McCarthy, 2011) Evidently it is reducing the amount of green house gasses emitted by fossil fuel use. However this is not the concern many had with the introduction of the tax, but the concerns were focused upon the externalities caused by this and the effects it would have on the economy. Three years since the carbon tax introduction and the Provincial level of GDP has remained approximately the same, (Greenery in Canada: We have a winner) With the provincial level of GDP remaining around the same, this suggests that at the very worst the carbon tax has had no negative effects to the provincial economy. Furthermore the tax also promised to remain carbon neutral and promised to cut corporate and private income tax. British Columbia has become the province with the lowest income tax regime and the lowest corporate tax regime (Greenery in Canada: We have a winner). Although the carbon tax is being praised by many, it still faces concerns as many still argue the ineffectiveness of the tax and what that means for the province.

Ontario has its own creative and effective strategies to combat climate change. One of Ontario’s goal is a low-carbon future. To accomplish this the province started making carbon reductions in 1990 and are on track to reduce carbon emissions by 15% in 2020, 37 per cent in 2030 and 80 per cent in 2050 (Climate Change Action Plan, 2017). Ontario’s target of reducing emissions by 6% was met on schedule in 2014 (Climate Change Action Plan, 2017). One of the reasons this has been made possible is because of Ontario’s investment in carbon reduction. For example, in 2015 Ontario committed $325-million payment to Ontario’s Green Investment Fund to support programs that help households and businesses implement

Stephane Dion (2007) published a summary of the liberal party’s proposal intended to decrease the carbon emissions in Canada. The liberal party suggested making the carbon emissions reduction not only a governmental concern but also the businesses need to get involved. This proposal recommended having a targeted goal so that all the businesses can be on the same page. The industries that would respect these new regulations and reduce their carbon emissions would be recognized and those that do not would be penalized. The party believed that the long-term positive effects outweigh socially and economically the negative impacts. The liberal party was certain that this new plan took into account the human lives threaten by climate change. Reading this article, the question that arose is: would this plan affect the economy of the country if applied?

Cap-and-trade is a program which uses a market-based mechanism to control greenhouse gas emissions, the primary driver of global warming. The “cap” sets a limit on emissions, which is lowered over time to reduce the amount of pollutants released into the atmosphere. It limits emissions in electric power generation, natural gas, transportation, and large manufacturers. The “trade” creates a market for carbon allowances, leading to more cost-effective pollution cuts, and incentive to invest in cleaner technology. The less they emit, the less they pay, so it is in their economic incentive to pollute less. Each allowance (typically equivalent to one metric ton of carbon dioxide) are auctioned or allocated to regulated emitters on a regular basis.

Although the Abbott’s government has an intention to subdue regulatory constraints on businesses by repealing the carbon tax, recently the senate has voted to block carbon tax repeal legislation which was convicted as ineffectiveness and high costing (Griffiths 2014). As a result, the carbon tax remains relatively high at a price of $24.15 per tone of CO2e Rio (Tinto Coal Australia 2011) which cost Rio Tinto $36.3 million in the last fiscal (Rio Tinto Coal Australia 2013), representing a “big government” trait. Attributing to the

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

In the spring of 2015, the premiers of Ontario and Quebec met to discuss to possibly introduce a carbon pricing mechanism in hopes of limiting the negative externalities associated with their industries. The agreement would lead to the imposition of a limit on emission caused by fossil fuels. Similarly, British Columbia has had a long history of imposing carbon tax as a method of punishing behaviours of its industries that cause environmental harms. While there is only limited disagreements between cap-and-trade and carbon tax, the introduction of such carbon pricing regulation has led to a greater debate on the effectiveness of carbon pricing to addressing environmental issues without harming the economy. While environmental groups and supporter

The analysis pointed out Australia being one of the most carbon producing country will have to allow regulations and policies to be implemented to curb the rising carbon emission such as Carbon Taxing and Carbon Trading.

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 February 2011, the Australian federal government declared a scheme to implement a Carbon Tax from July 1, 2012. Implementing this scheme has generated a controversial debate between Australians. The term “Carbon tax” refers to an environmental tax forcing polluters to pay per ton of carbon which they release into the atmosphere. This essay will provide the economical, social and political implication of carbon taxes, also with its introduction who will benefit and who would suffer.

Having a carbon tax will encourage further research and development of more efficient alternatives. With the extra cost of using fossil fuels, companies will look into alternative sources like solar and wind for their power needs. This tax will also be a monetary incentive on a local level to push consumers to look for alternatives. In turn, this lowers emissions, saves them money, and has a positive impact to the environment. The revenue collected from the tax could be directed to funding for those alternative energy sources. More funding means more opportunity to develop effective alternative sources, because today, fossil fuels are simply more powerful, effective, and reliable. Having options to other equally efficient and effective energy is good because depending on different regions; one source may be more

However, the Gillard government has instituted one fairly radical and controversial policy: the new imposed carbon tax which took effect on July 1, 2012. The tax requires 500 of Australia's top polluting companies to "pay a fixed price, starting at Aus$23 per tonne, for their carbon dioxide emissions for the first three years. The mechanism would then shift

Another political barrier is encouraging investment in clean energy. It is widely agreed that implementing a carbon tax would encourage investors to work towards cleaner fuels, nevertheless, the U.S. remains widely against additional taxes. Finally, the last obstacle is technological. With renewable energy and green technology being new, there are certain barriers that are holding back green technology from being beyond the current level of production (New York Times, Arthur Ochs). Energy means nothing if there remains no long term way to store it, “Energy is most useful to us when it is concentrated, transportable and storable” (Powering Planets, 41). So a larger capacity and longer lasting battery would be greatly beneficial to green technology as well as the outside that market due to the spillover effects.

Their results support their assertion that acknowledging these shortcomings is an important step in forming effective cap and trade schemes. Table 4 indicates they find an implied price of €39 per tonne for total emissions, but when they just consider the allocation shortfall the implied price increases to €79 per tonne. As an indication of the distribution of players in this market, the divergence of the mean (3.039) and median (0.028) carbon emissions allocation shortfall indicates that there a few large players with very large allocation shortfalls. This is supported by the European Commission’s estimate that 57% of the total amount of allowances between 2013 and 2020 will be auctioned – presumably sold to large polluters. Currently manufacturers get 30-80% of allowances for free, power generators get none (other than those with

The current level of greenhouse gases in atmosphere poses an alarming situation globally and for Australia in particular. Australia has the highest per capita carbon emissions in the world. Burning coal for the generation of electricity is the major single source of emissions for Australia (Diesendorf 2014). It has been ranked third among OECD countries and seventh in the world with respect to per capita greenhouse gas emissions due to energy (The Garnaut Climate Change Review 2011). Under the Paris agreement world has agreed to pursue a 1.5 degree centigrade limit to global warming and Australia has committed to reduce emissions by 26 to 28 per cent below 2005 level by 2030 (The Guardian 2016).