7 Apr 2014

Say yes to Carbon Tax

Lauren Zhu writes:*

The streaming BC carbon tax debate continues since the first day of its implementation in 2008. And as I have acquired more knowledge on the phenomena, I have become a total supporter of the tax policy. I believe that the most effective method to reduce green house gas emission is to implement compulsory policies including taxation (price each unit of emission), limited permit system (cap-and-trade) or set regulations on the production side. Among which tax policy would be the most efficient and effective policy to have to influence people’s behaviors. Tax on per unit of emission polluted has a direct impact on price (ex: gas price) which is the main mechanism of changing consumption of gasoline. In addition, tax policy is also the most cost effective. It doesn’t require huge amount of transaction cost and it is significantly simpler than cap and trade system. However, it is inevitable that tax policies encounter great political difficulties.

Bottom Line: If you want to reduce green house gas emissions; it is not FREE. And the alternative policies to a carbon tax (regulations) are more expensive and less economically efficient.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.