Write 5 pages with APA style on Which System Will Work Better, a Carbon Cap, and Trade System or a Straight Carbon Tax. Human activities such as industrialization are altering this carbon cycle by injecting more carbon dioxide into the air as well as by affecting the ability of natural sinks such as forests, to reduce carbon dioxide from the air. It is because of this that most governments have decided to take immediate action to save the environment from the risks associated with this issue. However, most countries including the United States have not been able to agree on the best way of curtailing carbon emission. Some stakeholders are in favor of a carbon cap and trade system others are in favor of a straight carbon tax system. .
A straight carbon tax system imposes a tax on units of greenhouse gas emitted and gives companies an incentive to decrease pollution. This method according to proponents would cost less compared with paying the tax. With this, the amount of pollution minimized depends on the tax level chosen. The straight carbon tax is set by evaluating the damage and cost related to each unit of carbon dioxide emitted as well as the costs connected to controlling that emission. In this case, getting the level of tax correct is important. That is, when it is too low, organizations are likely to go for the tax in order to continue emitting the gas, over what has been agreed. On the other hand, when the tax is high, the costs are likely to rise higher when compared with what is needed to minimize emissions, affecting returns, end-users, and even jobs.
A good number of people support a carbon cap and trade system. In their argument, a carbon cap and trade system sets an amount of carbon dioxide emitted, so that companies should pay money for their emissions, and they also will be charge seriously (Dinan and Spoor 15). At the same time, some companies may have some redundant emission, so they can sell it to other companies who need more emission of carbon dioxide.