Emission Tax Policy
The rate of emissions in the atmosphere is increasing each day. Theincrease has been due to the burning of the fossil fuels, increasedindustrialization, and the greenhouse gasses. The increased emissionshave led to change in the climate and to expose people to malignantdiseases. The condition of the weather has been continuouslyevolving, and even the water level in the oceans and seas isincreasing. The changes show that there has been climatic change. Theincreased negative impact on the emissions has led to the emergenceof the emission tax policy. This essay will discuss the emissionfiscal policy in the United States. It will also discuss on how ithas helped improve the climatic conditions as well as itscontribution to the economy.
The negativeimpacts that are being witnessed because of emission have led to thegovernment and the environmental agencies to come up with ways ofreducing the rate of emissions. The organizations and especially theindustries are the primary targets as they have high levels ofradiation. The attempt of reducing the emissions has led to thegovernment enacting taxes that will help in reducing the emissions(Pope and Owen, 2012). The industries are expected to emit to a givenlevel of gasses. Once the global emissions are reduced, the extent ofthe climatic changes will also decrease, and the costs and the risksthat are associated with the emissions will be either reduced oreliminated. The federal government has started to have regulations onsome of the emissions through taxation
Utilizationof in the United States
The emission taxpolicy is used by the United States to reduce the emissions from thelarge manufacturing companies. The tax is imposed at a rate of $ 25per metric ton. That means that the more a company releases carbon(IV) dioxide, the more tax will be levied on them. The level ofcarbon and other toxic gasses emitted is measured regarding theequivalent level of warming. The taxation is increased by 2% eachyear. After the emission tax as imposed on the manufacturing firms,transport industry and other companies that released carbon (IV)oxide, the rate of discharge have reduced by 10% for the last onedecade (Pope and Owen, 2012).
Explanationas To Why the Policy has Improved the Problem
The system isimproving the climatic change in the United States. The targetedindustries are the manufacturing sector and the transportationindustry. The two industries have the greatest level of emission thathas a significant impact on the climate. The core business of anyorganization is to maximize revenues and cut down the expenses in itsoperations. The introduction of emission tax policy translates to anadditional cost to the organization. Since every team wishes toincrease their profits and revenues, they will look for all means toensure that the level of emission is reduced (Hepburn, 2012). Thecustomers are aware of environmental conservation, and they willalways wish to collaborate with the organizations that care about thesurroundings. Thus, the policy has made the organizations be focusedmore on the environmental conservation.
EconomicPrinciples Used in Designing
Some economicprinciples have been used in developing the emission tax system. Theintroduction of the fiscal system will mean that the cost ofproduction and consumption will increase (Baumol, & Blinder,2015). The first principle of economics that have been used indesigning the emission tax policy is those prices do rise when thegovernment imposes any tax on the people. When a government imposes atax on the manufacturing industry, the tax will be transferred to theconsumers (Pope and Owen, 2012). The idea leads to an increase inproduction and the consumption cost. Thus, the cost of goods andservices increases so that the taxes can be compensated through theconsumers.
The otherprinciple used in designing the emission fiscal policy is that thestandards of living in a country rely on the country’s ability toproduce. A country that can produce products within its territory tosatisfy the needs of its citizens have people whose living standardsare raised. The level of unemployment is usually small, and thepeople have enough income to cater for their daily needs. In the caseof emission tax policy, the charge imposed per metric ton of emissionis uniform ad this leads to increased costs on emission by theindustries. When the cost of production increases, the cost ofbuying goods and services are also raised (Baumol, & Blinder,2015).
There have beenincreased global changes for the last decades. The scientists havefound out that the primary cause of the global warming is theemission of carbon dioxide. Thus, they have given some of thesuggestions on how the emissions can be reduced. Use of emission taxpolice in the United States has been put into place. Even though theintroduction of the policy has led to increasing the prices of goodsand services, the level of emission has reduced to some extent overthe last decade. Emission tax system is a good way of reducing theenvironmental pollution that occurs in the countries.
Baumol, W. J., & Blinder, A. S. (2015). Microeconomics:Principles and Policy. Cengage Learning.
Hepburn, C. (2012). Regulation of prices, quantities, or both: areview of instrument choice. Oxford review of economic policy,22(2), 226-247.
Pope, J., & Owen, A. D. (2012). Emission trading schemes:potential revenue effects, compliance costs and overall tax policyissues. Energy Policy, 37(11), 4595-4603.
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