Will Carbon Tax Mitigate the Effects of Climate Change? Essay

Words: 1822
Pages: 8

Climate change, as one of the most important century issues of human beings, is no longer just a scientific curiosity but already a growing crisis with economic, health and safety, food production, security, and other dimensions. As the United Nations Secretary General has described, it is the major, overriding environmental issue of our time, and the single greatest challenge facing environmental regulators (2010). There is no doubt that putting a price on carbon emissions is often discussed as one of the main solutions to anthropogenic this issue. As Jeffrey D. Sachs, director of the Earth Institute at Columbia University, said, imposing some sort of price on fossil fuels “is a big improvement over the do-nothing status quo” (2011). However, many skeptics argue that putting a price on carbon emissions is absolutely not the best way because the carbon tax is an unproven concept to reduce carbon dioxide emissions or mitigate the effects of climate change without creating economic disaster. In addition, comparing to the emission-cap or even direct investing on clean energy researching by government , carbon price will not really reduce emission that much to help environment. The impacts of making a price on carbon will be viewed and argued that if it is the best way or not .All of the issues will be mainly concerned about Australia, in which the carbon price was brought into effect on 1 July 2012(Clean Energy Regulator, 2012).

Firstly, as a policy which aims to make environment meliority , carbon price policy might be no guarantees that emissions will decline if consumption of the goods and services that produce carbon emissions remains unresponsive to price increases(Shrum,2007). Some businesses may choose to absorb additional costs associated with the carbon price, while others may choose to pass additional costs to customers by increasing the price of their goods and services. Especially in some industries are sometimes known in the jargon as EITEs (emissions-intensive trade-exposed industries). Public or we can say consumer simply will not have many choices without receiving these "fancying passes"(such as electricity, petrol for vehicles). For instance, in New South Wales, Australia, the Independent Pricing and Regulatory Tribunal (IPART) recently released a draft determination allowing for an average price of electricity increase of 16% across the state because of the carbon tax running.

However, some people would argue with the price rise because of the federal government of Australia is providing household assistance measures to assist households expected to deal with higher costs of living from the introduction of carbon pricing (Carbon Tax Centre 2007). The Federal Government has estimated that individuals will receive a direct payment (higher than rise of electricity) as financial assistance through one-off payments or via income tax concessions depending on the individual's financial situation. The payments have been called the Clean Energy Advance and have been targeted to help low and middle income households (9 out of 10). Moreover, individuals also receive favor through lower personal income tax and payments. - the tax-free threshold increased from $6,000 to $18,200 on 1 July 2012 and it will rise again to $19,400 the following year (Rohm 2012), which represent is the biggest overhaul of taxation since the Goods and Services Tax was introduced in 2000( Yeats, 2012).

Nevertheless, the compensation cannot cover everything. They are potentially regressive, with the impact of a flat carbon tax potentially greatest on the lowest income households. This effect is offset by the higher consumption of wealthier households, that is, as they consume relatively more energy than low income households they may be paying a higher and unfair rate of tax -negative impact for wealthy people (Nielson 2010). Furthermore, the sectors that would be most and directly affected were airlines, steel, coal-based mining,