Global Capitalism: A Key To A Lock Or A Bait To A Trap?
On November 8th, 2018, California’s worst wildfire ignited. The fire spread so fast that it took only four hours for it to blaze across the whole town of Paradise, destroying everything in its path. “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 after years, the residents of the area were unable to recover from the fire. Despite the fact that the fire was caused by human mistake, the usage of warming-driven fuel is obviously connected to present anthropogenic climate change. Carbon taxes have been imposed on firms that utilize fossil fuels in attempt to address this issue. It would, in theory, assist in reducing the usage of fossil fuels and consequently carbon emissions. However, because this strategy imposes additional obligations on governments, particularly in the global south, these measures are unlikely to have the impact that policymakers anticipated.
These policies were created with the best of intentions. If they are either forced to pay more or rewarded for using greener technologies and energy sources, firms may understand that as long as they use fossil fuels, they will have to spend more money than other companies competing in the same market. Emitters would earn a lower profit since the cost of utilizing fossil fuels has escalated, because they would have to pay for each ton of greenhouse gas emissions they emit. Large factories would be forced to pay a huge amount of money if the government implemented a progressive tax system, forcing them to modify their manufacturing style. Ideally, we will at least be able to make sure that companies and consumers pay for the external cost they impose on society. Especially, if the large companies switched to a greener energy source, carbon emissions would drop tremendously, 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) Meanwhile, the money raised from the tax would be used to reward individuals who pursue a more ecologically responsible manner of doing business or to spur economic growth by subsidizing climate change organizations and the government directly. The government might also address other social issues with this additional funding. Despite this lovely vision of a future with carbon taxes, this is an unrealistic model lacking maintenance or regulations.
The Enforcement of carbon taxes involves multiple steps. First and foremost, like with every other tax the government imposes, we must establish basic tax rate. This is a permanent question. What is a reasonable percent that keeps companies from using fossil fuel without exerting too much pressure on them that they simply stop do not abide to this new policy? According to Carlo Carraro, “A large number of taxable legal units implies a large implementation cost for the tax agency, since each unit requires separate treatment.” To tackle this problem, the government will almost certainly need to create a new department. The government would then have to recruit experts in this field, which raises another concern. The government would be responsible for providing office space, equipment such as computers and printers, as well as a decent salary. It may not be outrageously expensive for governments to recruit local specialists. Nonetheless, for a country that has never enacted any kind of carbon tax or incentive, it is extremely probable that specialists from other countries will be recruited. The cost of hiring an expert to calculate a reasonable tax rate based on the county’s present economic situation, much alone put up the entire monitoring system and potentially a separate system to reward environmentally friendly businesses, may be exorbitant. As a result, the overall quantity of federal revenue is more prone to drop.
Affluent companies that utilize fossil fuels could easily relocate their facilities to nations and areas without carbon taxes. Alternatively, companies might opt to pollute in secret to avoid paying taxes even if they cannot relocate. Governments are unlikely to detect this since carbon dioxide is difficult to trace. In comparison, we have no way of knowing whether Japan has already unlawfully released tainted nuclear water into the ocean. It would be considerably more difficult to determine how many greenhouse emissions these firms released. Even if we are able to determine the quantity of carbon emitted, the administrative costs would be huge if a government wishes to determine the exact amount of carbon emissions produced by each and every corporation. 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. Then, there are extra financial burdens on the governments.
This was also proven by the status quo: 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). Some governments may be unable to cover the cost of implementation and administration. Carbon taxes have been adopted in the majority of industrialized countries that are already economically prosperous. They don’t have to go for the lowest option to keep their economies in good shape. Other nations (mainly developing countries) which do not even have enough government funding to address poverty or create enough infrastructure are hesitant to implement this policy and exerts pressure on both the government and its citizens.
Furthermore, almost all of these nations that are struggling now were formerly exploited and colonized. They were pushed back to square one because their natural and human resources were being snatched away from them. “Pollution increases with economic growth in the early stages of development,” according to the environmental Kuznets curve, so they must make a trade-off in which the government chooses to sacrifice the environment so that polluting companies from developed countries can provide local people with jobs. Countries with financial problems would have to give up economic development if the carbon price, a capitalist policy, was implemented internationally. Due to global trade, this would be especially disastrous. Within the status quo, these economies have already faced tremendous competition. The additional expense would make them less competitive and more prone to economic crisis, making it even more difficult to address current economic issues such as poverty, starvation, and so on. They will only face more competition and problems as a result of this approach. As a result, forcing these developing countries to pay carbon taxes, whether directly or indirectly, is unjust.
Funding sustainable energy research and glorifying firms that work on developing green technologies is a better solution. The government would not need to create an entirely new system in this situation; instead, it would merely finance scholars working on related technology. Because government-funded researchers worries less about the cost of experiment, their final technology may be less expensive and more accessible to businesses. As a consequence, scientists will be able to earn the same amount of money at a cheaper cost, businesses will have access to green technologies, and the environment will be saved.
To conclude, climate change is a major concern that we must address. While carbon taxes and green technology incentives have been proposed to address this issue, they are unlikely to be implemented due to differences in economic standing among countries. Even if it were adopted, it would not be able to considerably cut carbon emissions and would likely impose additional expenses on governments, particularly in countries in the global south that have already been hammered by past colonization and exploitation.
