Download - Carbon Tax
CARBON TAX
Swapnil | Gaurav | Team | Suhail
SNAPSHOT
1. Introduction
2. Impacts on environment
3. Impacts on economy
4. Impacts on business
5. Impacts on households
6. Conclusion
INTRODUCTION TO CARBON TAX
FACTORS OF PRODUCTION
WHAT IS LAND?
LET ME TELL YOU A
STORY
I WAS LIVING HERE
LIFE WAS BAD :(
I USED MORE RESOURCES
LIFE GETS BETTER
NOW, I OVERUSED THE RESOURCES
I’M RICH AND GREEDY FOR MORE!!!
I WIN, EVERYBODY LOSES
“Each man is locked into a system that compels him to increase his herd without limit--
IN A WORLD THAT IS LIMITED”
~ Garret Hardin
HOW CLIMATE CHANGE HOW CARBON
EMISSION
IS DESTROYING
THE EARTH
GLOBAL WARMING
WHAT THIS MEANS FOR HUMANS?
CAUSING 200 BILLION IN DAMAGE – SAME AMOUNT AS 4 YEARS OF WAR
2 WAYS OF REDUCING EMISSION
1. Direct carbon taxing
2. Cap and trade with
other companies
DIRECT TAX
Carbon tax is based on economic principle of negative externality
Company A Company B
CAP AND TRADE WITH OTHER COMPANIES
WHAT THIS MEANS FOR THE ENVIRONMENT?
WHAT THEY THOUGHT WOULD HAPPEN…
KYOTO PROTOCOL
GROWTH AND THE ENVIRONMENTAL KUZNETS CURVE
We need to spend
180 billionper year globally to
maintain the
protocol
It would reduce
the temperature by
0.004 °C by end of
century
EUROPE 2020 POLICY
We need to spend
250 billionper year
It would reduce
the temperature by
0.05 °C by end of
century
WHAT THIS MEANS FOR THE ECONOMY?
Increase in cost of
inputs
Carbon TaxC
ost p
ush
infla
tion
Incr
ease
in c
ost o
f
prod
uctio
n
Increase in selling price
FROM ASSET TO LIABILITY
Carbon-emitting industry would be greatly affected by this larger decrease in demand
They become a
HUGE BURDENon economy
LOSING THE CUTTING EDGE
Increase in carbon price
Higher cost for exports
The country loses trade advantages
WHAT THIS MEANS FOR THE BUSINESS?
“The Australian Securities & investment
commission reports there were 10,632 company which have closed down 12% higher than GFC”
WHAT THIS MEANS FOR THE HOUSEHOLDS?
Effect of carbon price on expenditure($23/ ton)
Price of electricity increases by 10%
Price of gas increase by 9 %
Price of food increase by less than 5%
Overall effect is just
0.7%
HOUSEHOLDS SPEND MORE ON BEER (2.2%) THAN THEY DO FOR ELECTRICITY (2.1%)
FINDINGS - AUSTRALIA
Carbon tax of $23 is not enough
$100 per tonne of carbon tax needed to be charged to make an impact on current situation
This will collapse the
economy
GLOBAL NEW INVESTMENT IN RENEWABLE ENERGY
Source:UNEP,Bloomberg
CONCLUSION
We have been focusing on controlling the carbon emission
Instead, we should focus on solving the problem by research on green energy
“Every dollar on R&D would avoid $11 of climate damage”
INNOVATE OR PERISH