Hey there fellow VNers, I was wondering if any of you could spare 5 mins of your day to have a quick critique of my oral presentation piece. So far, the major critique i have received is that it is too 'wordy'. I was wondering if you could either substantiate this or offer any other issues with it.
The issue is Carbon tax, with my contention being that the emissions trading scheme is a far better alternative to the carbon tax
Imagine a world plagued with more frequent and destructive disasters, countries half submerged underwater, ecosystems wiped out entirely and the increase in prevalence of diseases all over the globe. This is what our world is heading for, if immediate and drastic action is not taken by governments all around our beautiful planet. In Australia this issue is even more urgent, as we are the largest polluters in the developed world, emitting around 27 tonnes per capita, when opposed to a global average of 6 tonnes per person. The Greenhouse effect and its consequences are now truly indisputable and are backed up by various statistics and a plethora of evidence. Now this is where the concept of carbon pricing has arisen, with governments designing costs for every tonne of carbon that large companies emit.
Now, Australia has taken active steps in the past few years to cut emissions, first by ratifying the Kyoto protocol in 2007, which aims to cut emissions by 5% by 2020, and more recently by deciding to implement the carbon tax. However, while the carbon tax is a step in the right direction, it is not the most efficient or effective strategy that out government could undertake. Australia must explore other alternatives, especially a specific emissions trading scheme, which incorporates incentives for green energy. The emissions trading scheme outweighs the carbon tax on a few fundamental grounds; environmental benefit, economic benefit, as well as the independence of its functioning ability coupled with the ease of its global implementation.
Now, I hear you ask, what is the difference between these two schemes? Well, essentially, a carbon tax is a price that large firms and companies have to pay for each tonne of carbon emissions. This has been set at $23 per tonne by the government. However, in an emissions trading scheme, a limit for carbon emissions is set by the government before the government auctions off these ‘carbon permits’ for amounts of these emissions.
Let’s begin with the most important aspect of both of these policies; reduction in carbon emission. There seems to be the misconception that the carbon tax will reduce emissions because it is expensive for companies to remain “dirty”. However, all it does is merely discourages emissions by making it slightly more expensive to do so! And therefore, emissions will only reduce if the cost involved with reduction is lower than the cost of the tax itself, which regardless can be passed on to the consumers! An emission trading scheme however, cuts emissions as it sets a limit on the total emissions allowed within a year, which then decreases annually. Now, assuming a reasonably effective enforcement mechanism, it ensures that the levels of carbon pollution reduce every year, which is necessary to meet goals set by the Kyoto protocol, and to ensure the survival of our planet. In addition, companies are also incentivised financially to reduce their emissions or find a ‘clean’ source of energy. If a company has left over carbon ‘credits’ for example, it can the resell these credits, and make a profit on their reduction. Now, do we REALLY want a policy which is simply going to make our lives more expensive, with negligible effects on emissions?
When looking at the issue in financial terms, the emissions trading scheme is again a far better alternative to the carbon tax. As the limit on carbon emissions reduces year by year, it becomes more and more expensive to emit this pollution. This leads to companies finding it a better alternative to invest in ‘greener’ technologies earlier, in order to avoid some of these costs, as well as the reward based system, as outlined above. It therefore becomes a more realistic approach to reduce these emissions, and leads to an overall reduction. Meanwhile, in the carbon tax system, a punitive approach is used, without a proverbial carrot to encourage the reduction. As a result, companies are able to simply pass on this increased cost to the consumer, hence minimising any significant decrease in profit. Consequently, the company is less likely to invest money to reduce emissions, as it becomes expensive to do so.
Now, the greenhouse effect is a global problem, and every single country must do its part to reduce emissions, and slow the progress of global warming. And therefore, when looking at an emissions reduction policy we MUST look at its feasibility on a global scale, and its ease of expansion. When we look at the carbon tax, it’s a project where every single government must adopt their own price for carbon, and set its own rules and regulations regarding it. Conversely, in an emissions trading scheme, a centralised body can be set up, where a global limit is determined and then worked towards. This is much more feasible due to the independence of the emissions trading scheme in its functioning ability. This independence arises as after the ‘credits’ are auctioned off by the government, the free market controls and regulates the price for carbon emissions.
A major argument against the implementation of an emissions trading scheme is that it is overly complicated and ineffective when it comes to combating emissions. However, we need only to look at some of the current examples of emissions trading to see the feasibility of such a project. To begin with, a famous example of the emissions trading scheme in use is the European Union ETS. While coming under severe criticism in its first phase, it still managed to reduce carbon emissions by a whopping 11% in 2009 when compared to 2003. That’s a reduction of over 500 million tonnes of carbon dioxide. It is projected to have cut 21% of emissions by 2020, a staggering figure on a multi national level, again demonstrating the ease of global implementation. Another important example to observe when discussing the validity of emissions trading is the sulphur dioxide trading program in the U.S., which is estimated to have saved over $1.4 trillion of costs caused by these emissions.
The emissions trading scheme is more efficient financially, is better implemented on a global scale and most importantly of all is ASSURED to cut emissions. The success of the scheme all around our globe is a clear indication that while also being better on paper, produces substantial results. How can we sit around and cross our fingers that the carbon tax will reduce emissions? How can we justify not taking immediate action to implement the emissions trading scheme RIGHT NOW?
Now, you may have heard that the government ‘plans’ to implement an emissions trading scheme 5-6 years from now. That’s assuming that popular opinion doesn’t change, government doesn’t change and the government keeps their promise. And when the future of our ENTIRE WORLD rests in the balance, WHY WAIT?
Any help would be greatly appreciated!
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