Carbon Pricing

Carbon Pricing

Introduction

Use of carbon have resulted in creating pollution in the environment and has resulted in global warming it imposes adverse effects on the environment resulting in causing negative externalities which is harmful for the society it is the responsibility of organizations to ensure that they ensure their operations does not cause harm to the external environment. Since carbon emissions causes pollution that creates negative externalities to the economy therefore it has been suggested that there should be restrictions imposed on the discharge of carbon to ensure that economy is saved from the increasing threats to the environment that carbon emission is tend to cause (Qiang, 2011). Although it is important to put a price on carbon yet it has been stated that imposing restrictions on carbon will cripple the economy and the advantages that carbon and other fuels bring to the economy cannot be avoided as these are significant for the development of the economy. It would not be appropriate to only consider the costs that are associated with the carbon emission the positive impact that it has on the society cannot be neglected as it is crucial for the enhancement of the economy (Timmer, 2012).

By conducting the cost benefit analysis the impact of the putting a price on carbon can be evaluated effectively. As we rely more on energy sources and production that creates pollution in the environment it will cause the earth to warm, despite that we are available with more clean and safe sources which may include solar, wind, geothermal and wave, however these sources are considered to be very expensive and they are not cost effective than the old polluting energy sources such as carbon (Harrison, 2011). Since this result in pollution the proposition to impose a charge on carbon has proven to be an effective strategy to save the environment, it is essential to put a price on businesses that are engaged in activities that result in negative externalities the best way to minimize the effect of this pollution on the environment is to put a price on carbon which is beneficial both economically and environmentally by putting a price on carbon it will help to encourage the use of clean energy technologies and will lead to innovation, it will assist businesses that are in need of it by introducing innovative and efficient ideas (Cohen, 2011). Government of Australia has initiated its long awaited program to impose taxes on the companies that are engaged in carbon emission, its purpose is to boost innovation in clean energy the collection of these taxes will be then be used for development of these sources. It will create a positive impact on the climate of Australia.

In response to the scheme that has been implemented by the Australian government to decrease the impact of carbon emission on the environment, it has been stated that it will be a great burden for the economy to decrease the productivity of carbon as it will result in hindrance in the economic ...