A Carbon Tax: The Solution to Pollution

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A Carbon Tax The Solution to Pollution

• Becky Carson Kyle Spurgeon

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What is Global Warming?

• It is when CO2, methane, nitrous oxide, and
  chlorofluorocarbons (CFCs) are released into the
  earths atmosphere absorbing infrared radiation
  and impeding the escape of planetary-generated
  heat.

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How do greenhouse gases enter the atmosphere?

• Many of these gases are released by burning
  fossil fuels.
• The most common sources are car exhaust and
  factory emissions.

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Repercussions of Global Warming

• Global temperature increases of 2-10F
• Melt the polar ice caps and raise sea levels
• Destruction of ecosystems
• Severe changes in storm patterns and frequency.

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• Many of the greenhouse gases are released by
  burning fossil fuels.
• Carbon Dioxide is the most abundant contributor
  to global warming.

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Finding a Solution

• This is extremely challenging because
• greenhouse gases cant simply be cleaned up from
  the atmosphere.
• Americas increasing dependence on fossil fuels
  makes it nearly impossible to ban them from use.

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The Key to Reducing Emissions

• The current price for fossil fuels does not
  accurately represent all the true costs on
  society
• Health costs
• Global warming effects
• Destruction of the environment
• To reduce emissions, the price of fossil fuels
  needs to reflect the real societal costs.
• An energy tax would be an appropriate regulatory
  instrument to reduce the emission of
  greenhouse gases by raising the price
  and discouraging the use of fossil fuels.

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Methods of Taxing Energy

• An effective method of raising the price to an
  efficient level is through an energy tax.
• Some energy taxes include
• Gasoline taxes
• BTU taxes
• Carbon tax

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Gasoline Tax

• A gasoline tax simply would not have enough of
  effect on the overall causes of global warming
  due to
• the elasticity of demand for gasoline
• the political unpopularity of the tax
• the unfeasibility that it could decrease CO2
  emissions enough by itself since it targets only
  one of the four major fossil fuels.

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BTU Tax

• A BTU (British Thermal Unit) tax targets the
  energy content of fossil fuels.
• The BTU tax would impact the four major fossil
  fuel sources coal, crude oil, natural gas, and
  gasoline.
• However, the disproportion of BTUs to CO2
  emissions from fossil fuels weakens this taxs
  ability to effectively reduce the real problem
  with fossil fuels the release of CO2 not BTUs.

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Carbon Tax

• A carbon tax is based directly on the carbon
  content of each particular fossil fuel.
• The carbon tax is the most accurate tax
  per unit of CO2 emitted since the carbon in
  fossil fuels is proportional to CO2
  emitted.
• This is the best energy tax option to reduce
  the emission of CO2, the most prevalent
  greenhouse gas.

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Setting an Optimal Tax

• Goal of the tax is to begin to reduce Americas
  CO2 emissions and fossil fuel dependency.
• A decreasing trend is more important than
  reaching an exact level immediately.
• Since future marginal damages can only be
  speculated, the following model can be used to
  set an approximate optimal tax level...

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Optimal Carbon Taxs Effect on Pollution Abatement
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Conclusion

• Of the three energy taxes, a carbon tax provides
  the best means to control CO2 emissions across
  the scope of all fossil fuels.
• It would begin to change the CO2 emissions trend
  that exists in the U.S. today.
• A carbon tax could indeed be the United States
  solution to pollution.