Can Global Capitalism Solve Climate Change?
On November 8th, 2018, the deadliest wildfire in California ignited. The fire was spreading so fast that it was only four hours when the fire traveled all the way through the town of Paradise, tearing apart everything on its way. “85 people lost their lives” “8.4 billion dollars was lost in this single fire.” (Boghani, 2019) Local citizens were not able to recover from this fire even after years. Even though the fire was started because of a human error, the use of warming-driven fuel is clearly linked with current anthropogenic climate change. The rise in temperature driven by these fossil fuels lead to more extreme natural disasters which brings sufferings to people all around the world. These disasters caused greater harm for developing countries that are less affluent, as typically they are less prepared for disasters and may not be able to provide adequate disaster relief to those whose lives will be uprooted by these extreme . (?)
In this debate about the best solution to reduce climate change, the ultimate goal is to reduce the frequency of natural disasters that in turn prevent casualties and economic loss, especially for those who were already experiencing financial difficulties. Some say that giving incentives to companies that use green technology and pose heavy tax on those who pollute helps reduce the use of fossil fuels and thus reduce carbon emissions. However, these methods are unlikely to achieve the impact that policy makers suspected because some industries do not have a cheap enough green technology substitute for fossil fuel. No matter how much carbon tax they have to pay they cannot stop using non-renewable energy sources, this creates further negative impact. In the following passage, I will be explaining why the final impact of enforcing green technology incentives and carbon taxes would not be able to achieve the impact they claimed.
Indeed, these policies were made out of good intentions. Government poses carbon taxes and green technology incentives in order to discourage burning fossil fuels, including coal, oil, gasoline, and natural gases.(?) Ideally, we will be able to make sure that companies and consumers pay for the external cost they impose on society, while these money would be used to encourage the ones who pursue a more environmental-friendly way of production. For example, in UK, “coal use fell sharply after introduction of a carbon tax of around $25 per ton in 2013. And greenhouse gas emissions have fallen to lowest level since 1890.” (Plumer & Popovich, 2019) It seems like this technology could not only reduce the emission by motivating customers to seek cleaner energy, but also boost economic growth by funding agencies managing climate change effects and the government itself. However, this is an idealistic model that does not involve maintenance and regulations. There are loopholes in this model that we cannot avoid.
Coming back to the realistic side, this policy is very unlikely to be carried out perfectly, so it should not be implemented globally. To begin with, there are limited countries which presently enforced carbon taxes: Argentina, Canada, Chile, China, Columbia, Denmark, the European Union, Japan, Kazakhstan, Korea, Mexico, New Zealand, Norway, Singapore, South Africa, Sweden, the UK, and Ukraine. Most of these countries are developed countries that are already economically well off and do not have to pursue the cheapest way to maintain the best condition of economics. Other countries which do not even have enough government revenue to resolve the poverty issues or build adequate infrastructure within the country are unwilling to add more pressure on common citizens. Furthermore, A lot of these countries that are not well off these days were exploited and colonized in the past. Because their natural and human resources were taking away from them, they were sent back to square one. According to environmental Kuznets curve, “Pollution increases with economic growth in the early stages of development”, so they have to make the trade-off, which the government choose to sacrifice environment so that the polluting companies from developed counties could provide local people with occupations. When carbon tax, a capitalism policy, was enforced globally, countries with finical issues would have to give up economic growth. This would be especially detrimental because of global trade. These countries have already experienced fierce competition in the status quo. The extra cost would make them less competitive and more likely to experience economic crisis, which makes it harder to resolve current economic problems like poverty, starvation, etc. With this policy they are soly going to face more Therefore, it is unethical to directly or indirectly force these developing countries into carbon taxes.
This also brings out another potential concern especially when current taxes were not applied worldwide: wealthy enough companies that uses fossil fuels could simply move their factory to countries that do not have carbon taxes. Or, firms could choose to pollute in secret to avoid tax. And this is unlikely to be detected by governments as carbon dioxide is very hard to trace. In comparison, we cannot even identify if Japan has already illegally emitted the contaminated nuclear water into the ocean. It would be even harder to identify how much carbon these companies actually released. Even if we are somehow able to identify the amount of carbon released, let’s consider the administration cost if a government wants to find out the exact amount of carbon emission. It may exceed the amount of tax collected. Moreover, “a variety of factors could influence the level of administrative costs of a tax, including the tax base; the tax rate; the exemptions, deductions or credits; and other factors.” Said Shuting Pomerleau, a Climate Policy Analyst. Goernment Then there are extra financial burdens on the government as they also need to pay for the green technology incentives.
While the government is facing enough issue, this policy could stifle future innovation of green technology which makes it even harder to have cheap and available green technology in the future. As a type of government regulation, carbon taxes faces the same issue all other government financial incentives: it could be biased against small companies. In this case, most green technologies nowadays are not accessible and cheap enough for everyone. Under this circumstances, only huge companies which usually possess abundant funding can afford to use green technology. Existing smaller companies or startups might not be able to afford such high-cost production methods, especially because these expensive machines and equipment always have high maintenance fee. When incentives were implemented only well of companies get the tax reduction on green technology while small companies get the tax burden. On a local level this might still be considered as benign competitiveness, on the global level, it undermines long-term local economics even more. “We oppose funding that goes out of the community by attracting global corporations that will leave after their incentive is finished.” Said Nick Shaxson. These international corporations came when there are incentives. Costumers mostly or only buy products or services from them. As the result of lack of costumers, small companies were crushed and driven out of the market. When the incentives end, the large companies moved to another place. Its original staff would lose their job, the local suppliers would lose their bigist customer. In the end, the economic status is not going to be worse than the status quo.
To conclude, climate change has been a serious issue that we need to resolve. While carbon taxes and green technology incentives were made out of good intentions to resolve this issue. It is unlikely to be put into practice, because of the variance of economic status in different countries. Even if it was put into practice, it would not be able to reduce carbon emission to a large extent and may cause extra burdens to the government.
Move Government revenue part before the argument(?)
