Question

What are some examples of arguments for and against an emissions tax?

Answer 1

An emission tax is levied on industries and commercial plants for emitting harmfull toxic gases and particles into the enviornment during their production processes. Emission tax is imposed in order to dissuade plants and indudtries not to use products which pollute the enviornment and destroy its ecological balance. There are many examples of arguement for and against an emission tax of which some are discussed below.

Arguements for emission tax-

1) Fiscal situation of U.S can be improved by levying carbon tax and reducing its emission:- Revenues from carbon taxes can be used to reduce other taxes which was first estimated by Senior fellow Adele Morris while formulating policies for the hamilton project. According top him, budget deficit of USA pose serious threat tothe regulatory system which could be cured by levying carbon tax cutting down the national debt which would help to formulate reforms for the regulatory system and also helps in reduction of carbon emission into the atmosphere.

2) Emission tax can help in settlement of the workers in coal mines:- Due to the falling production of coal in U.S in order to protect the surroundings of a coal mine, most of the workers in coal mines would be unemployed. Levying taxes on emission from industries might help them to get engaged in other employment sectors developing various employment oriented ventures.

3) Socially efficient outcomes are achieved:- Levying emission tax will make people aware not to use dirty and harmfull products for the enviornment which destroy the enviornmental balance. Paying taxes for harming the envirnemnt will force them to reduce activities which pose threat to the envionrmnet which in turn will show positive result for the greater benefit of the society.

Cons against emission tax--

1) It destroys the competitive market of America:- Levying emission tax will badly affect the economy of America as most of the industries who need to pay the emission tax might shift their production process to some countries who do not have such type of taxes.

2) The cost of goods will go up:- Putting extra tax on industries will result in higher input cost which will lead to the prices of products go up to manifold hurting the income of lower and middle class badly.

3) It might not help in improving the climate condition:- Levying emission tax and not formulating any policy to regulate the industries emitting harmful substances into the atmosphere might lead these industries to take the situation granted by increasing their productivity more in order to compensate the emission tax.