Executive summary
This article discusses the topic are there issues with revenue –neutral carbon tax as reported on the wall street journal of April 17th 2013.with increased campaign on the need for reduction on emissions that have caused an increase in the quantity of green house gases that have led to dramatic climatic changes.
According to the Washington post of 25th April 2013, it’s depicted that, “For years it’s been obvious in policy-wonk circles that a carbon tax is a great idea.”
Many nations especially the developed ones like those in Europe have in America have opposed this move to have a social cost inform of carbon tax for every emissions of green house gases from their activities. Such countries have felt that this is a move to increase their costs of production and make their products more expensive which would make them less competitive in the global market.
Introduction
Taxes are known to be an expense to the bearer be it an individual or a corporate and they minimize the net financial benefits of an entity. Pollution of the environment causes an adverse externality to the society. Pollution such as emission of carbon gases by heavy manufacturing industries have been on the rise causing an increase in the quantity of green house gases which in turn cause global warming which have affected virtually everybody in the world. Many organizations have championed for enactment of tax liability to the companies causing such emissions in order to compensate the society for such suffering that is in an open way tied to the activities of the organization. This compensation would count as asocial cost to the entity and a benefit to the society. The big question is, are companies willing to pay this tax liability and what effects will it have from a global perspective.
It’s due to such prevailing and projected emissions that have necessitated the imposition of carbon tax.
Reaction from corporate section
Carbon tax is not just and fair since carbon cannot be qualified as pollutant to the extent of enacting a tax on it. Participants in the energy sector have argued that carbon dioxide is not the only pollutant contributing to the green house gases and neither is it the worst, why then should the tax be directed to the carbon emission in the companies in the energy sector that are producing much of the carbon gases. In wall street journal of 17th April 2013, Wichita, ken argues that, “carbon dioxide isn't a pollutant in the normal sense of the term in that it doesn't harm people or animals and is actually beneficial to plants and trees.”An America argues that this is a disastrous strategy targeting the Americas energy sectors with an aim to bring it down of which they would not accept. This would cause an increase in their costs of operations as well as arise in prices of their products which would fuel inflation.
Its clear that from the corporate section they hedge against the claim of increased cost of production and the believe that carbon is not the only pollutant cause an increase in green house gases and thus a carbon tax is an ill motive to the corporate entities in the energy and production sectors.
Reaction from the society
Carbon tax would be a form of compensation for adverse effects they have suffered from the increase in quantities of carbon gases which have resulted to a change in climate. Such compensation would be used for certain social projects aimed at curbing climatic changes and thus beneficial to the society. As depicted from the wall street journal of 17th April 2013 Hinsdale argues that, “I agree with the idea of a carbon tax as the best policy approach, the fund should be separated from general revenues, but I would place a priority on a trust fund for energy research and development.”
Such development would ensure that safer forms of energy are created and thus we can break off from the cycle of polluter- pays.
Such taxes would be used in energy research which has been lacking for many years due to insufficient funding. The best solution to the carbon problem is not tax, the solution lies in researching for better non carbon energy at a lower cost which is only possible through research. The policy of carbon tax would only be short-lived as research would provide a better, safer and tax free form of energy.
Problem of compensating the society
It has been claimed that the tax returns will be used to compensate the society for loss suffered due to climate change caused by emissions of carbon the problem the society asks is how the returns will be apportioned to the society and on what basis? Will the method of compensation be fair and just or will it cause the problem of inequality. It would be ill informed to tax, raise money without a better formula of utilizing it.
In a nut shell the topic of carbon tax is debatable in which a prime objective of curbing the emissions should be prioritized in order to make the world safer for everyone, carbon tax may not provide a lasting solution but a move to minimize or eradicated the carbon pollution would be the best as long all the parties reach such a consensus.
Reference:
The wall street journal. (April 17th 2013). There are issues with revenue –neutral carbon tax. http://online.wsj.com/article/SB10001424127887323346304578426721201390256.html. accessed 29th April 2013.
The Washington post. (April 25th 3013) Carbon tax on the table in the senate. http://www.washingtonpost.com/blogs/post-partisan/wp/2013/04/25/carbon-tax-on-the-table-in-the-senate/ accessed 29th April 2013.
http://online.wsj.com/article/SB10001424127887323346304578426721201390256.html
