Towards a Sustainable and Inclusive Low-Carbon Economy: Why Carbon Taxes, and Not Schemes of Emission Trading, Are a Cost-Effective Economic Instrument to Curb Greenhouse Gas Emissions.

Author:Ionescu, Luminita
  1. Introduction

    A carbon tax represents the most adequate scheme for impeding carbon emissions, while charging consumers. (Hagmann et al., 2019) Emission trading is not a coherent policy tool for the decrease of carbon emissions. (Tapia Granados and Spash, 2019) As emissions trading approaches have encompassed price-based provisions, carbon tax schemes can incorporate quantity-based ones, i.e. environmental integrity procedures adjusted to offer more certainty as regards the subsequent volume of emissions. (Brooks and Keohane, 2019)

  2. Conceptual Framework and Literature Review

    A nudge scheme claims marginal benefits with reduced expenses, but nudges designed for decreasing carbon emissions may have an adverse indirect consequence by promising a swift remedy and thus diminishing backing for more effective policies. (Hagmann et al., 2019) Cap and trade having an auction of allowances constitutes a relevant alternative for carbon pricing with noticeable upsides. (Raymond, 2019) Carbon prices are developing in numerous areas worldwide (Andrei et al., 2016a, b; Dusmanescu et al., 2016; Lazaroiu et al., 2019; Popescu, 2017), but are quite inconsistent (Chapman, 2018; Kelly, 2018; Mala and Bencikova, 2018; Popescu et al., 2018; Strielkowski et al., 2017) and chiefly typify indications of national urgencies. (Cox and Edwards, 2019) A carbon tax may act negatively on coal-producing countries: under-privileged economies tend to bear an excessive proportion of the responsibility of carbon taxes on transportation fuels. (Fullerton and Muehlegger, 2019)

  3. Methodology and Empirical Analysis

    I inspected, used, and replicated survey data from Columbia SIPA Center on Global Energy Policy, EPA, IMF, Institute for Policy Integrity/NYU, Rhodium Group, and Statista, performing analyses and making estimates regarding range of estimated percent change in energy prices in 2030 due to carbon tax, favorability of having a carbon tax among U.S. voters (%, by political views), domestic economic sectors likely to be negatively affected by climate change (%), and the most efficient way to implement the carbon dioxide emission targets set by the U.S. EPA's "Clean Power Plan" for each individual state's electricity sector (%). Structural equation modeling was used to analyze the data and test the proposed conceptual model.

  4. Results and Discussion

    Instituting a green energy default nudge decreases backing for a carbon tax. (Hagmann et al., 2019) Associated with intersectoral connections, planned sectoral carbon taxes are a more adequate way of diminishing emissions than economy-wide carbon pricing. A carbon tax demanded for all spheres lowers aggregate emissions, while taxes directed...

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