What is Carbon Pricing and Can It Work?
Written by Pranavi Khaitan , a grade 12 student and senior editor at I Kid You Not.
Climate change has emerged as a global concern for nations around the world.
Written by Pranavi Khaitan , a grade 12 student and senior editor at – I Kid You Not
Climate change has emerged as a global concern for nations around the world. It is a threat to the security and survival of the human race and can have devastating effects on the planet. Greenhouse gas emissions contain 82% of carbon dioxide and are a major contributer towards climate change. Economists around the world have proposed the policy of Carbon pricing to help reduce carbon emissions.
What is Carbon Pricing?
Carbon pricing is based on the principle that if a product costs more, people will buy less of it.
When a person drives above the speed limit they pay a fine. This fine represents the possible accidents and losses of life, machinery, etc , that could occur when a person engages in such an activity. Similarly carbon pricing refers to a method in which a price is set on carbon emissions and is paid by emitters, like a fine for the consequences of utilizing carbon.
How is carbon pricing carried out?
Carbon Pricing has been executed in two ways:
Carbon Tax: a carbon tax directly establishes a price on carbon emissions and so a company is charged a certain amount for every ton of emissions.
Cap and Trade: A cap and trade program issues a set number of emission allowances or permits each year. These allowances are then traded between companies resulting in the creation of a carbon price.
Both these systems will result in reduction of emissions and more importantly facilitate the development of carbon neutral technology and alternative products.
Are there any disadvantages to carbon pricing?
Through carbon pricing the cost of products such as electricity and air travel will increase and this will create a burden on the poor. However, this can be overcome if governments use the revenue they collect from carbon fees to support poor households.
Over 40 countries around the world have implemented carbon pricing in one way of another and the results have been shocking. In the UK there is a price of 25$ for every ton of carbon and this has led to a fall of carbon emissions to levels last seen in 1890!
The need to tackle climate change is more imminent than ever before. We must urge our governments to take action and encourage policies like carbon pricing so that resources are used intelligently and our future is secured.
Written by Pranavi Khaitan.
Pranavi is a 16 year old student studying at Modern School Vasant Vihar. She has a passion for writing and photography and expresses this passion by assuming the role of editor for her school magazine. She wishes to create powerful content that makes an impact on the reader and sends a strong message.