Pricing Carbon Pollution: Reducing Emissions or GDP Growth?

• Author: Ionescu, Luminita

1. Introduction

   Coherent approaches to cut down greenhouse gas emissions are essential so as to make significant progress in focusing on climate change. (Best et al., 2020) Carbon emissions produced by business operations may result in relevant large-scale climate change: the economic upsides of decreasing carbon emissions surpass the expense of reducing carbon emissions. (Shi et al., 2020) Carbon taxes shape fossil energy prices while revitalizing renewable sources. (Goncalves Mollica and Perrella Balestieri, 2020) Escalating the carbon price may ensure considerable declines in transport-related greenhouse gas emissions. (Gaigne et al., 2020) Companies invest in carbon emissions decrease to cut down the carbon tax expenses as various governments progressively adopt carbon tax to enhance the environment. (Nie et al., 2020) The intensifying integration of carbon expenses by companies is key in shifting to a low-carbon economy. (Bento and Gianfrate, 2020)

2. Conceptual Framework and Literature Review

   Carbon emissions tax is an adequate market-based approach to reduce carbon emissions, influencing participants in the supply chain to reconsider their appropriate operational decisions. (Zhao et al, 2020) Carbon tax on energy production sector escalates energy supply expenses, while carbon emission trading exacerbates energy demand expenses. (Jia and Lin, 2020) Both a carbon tax and environmental subventions constitute coherent strategies (Andrei et al, 2016a, b; Dusmanescu et al, 2016; Lazaroiu, 2017; Mircica, 2019) to curb greenhouse gas emission. (Xu et al, 2020) The clout of carbon tax develops on consumers' feedback (Atwell et al, 2019; Groener, 2019; Lazaroiu et al, 2019; Nica, 2019) to price changes. (Tirkaso and Gren, 2020) Various emission regulation approaches impact the companies in reconfiguring their supply chain (Brown et al, 2020; Kowo et al., 2019; Lazaroiu et al, 2020; Popescu et al, 2018) in the direction of sustainable management. (Rout et al, 2020) Concerns as regards detrimental transitory consequences of carbon pricing on companies' or sectors' large-scale competitiveness are not reasonable as carbon price levels are affordable and due to exonerations to industrial carbon taxes, or substantial levels of costless allowances to companies protected by emissions trading schemes. (Venmans et al, 2020)

3. Methodology and Empirical Analysis

   Using and replicating data from ACU, BVA, EIB, IER, Pew Research Center, and UNSW, I performed analyses and made estimates regarding the environmental effectiveness of carbon pricing. Data were analyzed using structural equation modeling.

4. Results and Discussion

   Independent climate policies could not attain predetermined emissions decreases: carbon pricing provides an exemplary opportunity to carry out largescale strategy synchronization, which is necessitated to fortify climate approaches and adequately tackle climate change. (van den Bergh et al.,

   2020) Taking into account the carbon tax policy, companies are more driven to enhance carbon reduction levels by cutting down their carbon tax expenses but have to cover carbon decrease costs that may lead to insufficiency of capital, thus confronting issues of financial limitations which may discourage them to produce more ecological goods. (Cao et al, 2020) Industrial and energy structures are fluidly redesigned by hindering the output and harnessing of the coal and oil domains but furthering that of the clean energy and the service sector. (Li and Ouyang, 2020) (Tables 1-10)

5. Conclusions and Implications

   The expense and demand consequences of cutting down the product carbon footprint have an effect on the profit-maximizing...