January 22, 2009
UNIT 5: EcologyCharging to Pollute
Carbon dioxide is the primary gas that causes the greenhouse effect which traps heat in our atmosphere and is part of global warming. Carbon dioxide is a product of many chemical reactions, such as the combustion of gasoline, coal, and other carbon-based materials. Our homes, factories, and cars release a lot of carbon dioxide into the atmosphere. Carbon dioxide gases that are released into the atmosphere are called carbon emissions.
The United States government and many economists, or people who study money and markets, have been looking for ways to charge for carbon emissions. They hope that charging for carbon emissions will discourage individuals and businesses from releasing so much carbon dioxide into our air. By making carbon emissions expensive to those who release them, individuals and companies may turn to the use of less-polluting products, vehicles, and ways of life.
In many different articles published in the Oxford University Press Journal, economists have proposed some interesting strategies of charging for carbon emissions:
- Carbon tax A carbon tax is a tax applied to fossil fuels, such as gasoline, which are carbon-containing materials that release carbon dioxide when they are burned. This tax would increase the price of gasoline and other fossil fuels. A carbon tax would cost most to the people and companies that use the most fossil fuels.
- Cap-and-Trade The cap-and-trade strategy begins with government setting limits for emissions. Then, the government will sell permits for companies to release carbon emissions up to that limit. Going over the limit will mean extra fines and costs for the company. Companies can trade permits with other companies, if they so choose.
- Cap-and-Trade Hybrid This strategy is similar to the cap-and-trade strategy described above, except that government would set a maximum price that companies could be charged.
Do you think the government should charge for emissions? How do you think they should do it?