An essay I wrote during the summer holidays last year.
What is carbon price?
What is carbon pricing? Carbon Pricing is a method of reducing greenhouse gas emissions nationally. When greenhouse gases such as carbon dioxide are released into the atmosphere, they cause global warming due to trapped heat. Greenhouse gases come from our everyday activities, such as the electricity we use in homes and offices are produced by burning fossil fuels. Placing a price on carbon can involve taxes, subsidies or an emissions trading system. According to the Australian Government, carbon pricing is the “most environmentally effective and economically efficient way to reduce pollution”. In a nutshell, carbon pricing is putting a standard pricing system on the national carbon emissions.
Why do we need a carbon price? Currently, polluting is “free” (if you don’t count the cost on our environment). Putting a price tag on carbon emissions means forcing consumers to pay for every single tonne of carbon pollution that they release into the atmosphere. In this way, we control and stabilize the concentration level of greenhouse gases in our atmosphere, thus saving the environment.
Why choose carbon pricing? Why is it effective? There are many measures that a government can take to insure the reduction of greenhouse gas emissions: Carbon pricing, carbon dioxide storage, replacing burning of fossil fuels with renewable energy sources, regulations and standards, organizational change, and education.
Firstly, people actually think before they use money. Money is hard to earn and people will think twice before wasting electricity on unnecessary items at home or in offices. If there is a price on carbon, people would wish to save their money, so they would take the precaution not to consume too much electricity. Secondly, carbon pricing is a method of reducing carbon emissions without paying on the government’s part. Other ways, such as carbon dioxide storage or replacing burning of fossil fuels need high technology. This will need money to produce satisfactory results and reduce the amount of greenhouse gases released into the atmosphere.
Then what are the disadvantages of carbon pricing? Nearly every aspect of economic activity results in greenhouse gas emissions. To have significant impact, carbon pricing will need to be used in all fossil fuelled economies, or else business firms and companies will just move to another location in order to “escape” paying. Greenhouse gases emitted in a country without carbon pricing will affect people in other carbon pricing countries. For this we need an international standard for carbon pricing, which can be costly and very hard to accomplish. Placing a carbon tax or emission-trading system will increase the cost of electricity and will decrease the competitiveness of business companies which use a lot of energy. This could result in an unwanted economic and financial outcome.
Currently, carbon taxes are discussed in the United States of America, Canada, New Zealand, Australia and other European countries. Some programs have even been implemented. The question is: Is an international carbon emission pricing system just a dream for eco-friendly countries, or is it possible in our near future?
We can all help by reducing carbon emissions, whether our country has a carbon price or not. We can cut down our electricity usage by buying eco-friendly products, such as light bulbs that use less electricity. We can also turn off electrical appliances when they are not of much use. Every single little move we make towards reducing carbon emissions will help to our global goal of saving our environment, our energy sources, and our future.
