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Climate Policies, Carbon Pricing, and Pollution Tax: Do Carbon Taxes Really Lead to a Reduction in Emissions?

1. Introduction

A carbon tax represents the most adequate policy for regulating carbon emissions while charging consumers (Hagmann and Loewenstein, 2019): it is a practical addition to emissions trading system and may advance enterprise low-carbon technology restructuring and distribution to a certain degree. (Wang et al., 2019) The liability for carbon emissions is likely to be dissimilar under distinct emission accounting standards. (Zhang et al., 2019)

2. Conceptual Framework and Literature Review

Nudges intended for cutting down carbon emissions may have a negative indirect consequence if they stipulate a swift way out and thus subvert backing for policies of a more significant impact. (Hagmann and Loewenstein, 2019) The present international impetus for carbon pricing has recently brought about carbon taxes enabling the employment of counterbalances from emission sources not intended by the carbon tax for adherence to the tax load. (Wang-Helmreich and Kreibich, 2019) Carbon tax, the most coherent procedure to moderate greenhouse gas emissions, intensifies imbalances as impoverished households pay out a greater proportion of their earnings on carbon-intensive products. (Fremstad and Paul, 2019) An undifferentiated carbon tax skyrockets financial accountability on manufacturers and hinders their commitment to produce. (Zhou et al., 2019)

3. Methodology and Empirical Analysis

Building my argument by drawing on data collected from CLOSUP, The Economist, Institute of Public Opinion, IMF, IPCC, NYU Institute for Policy Integrity, Pew Research Center, Statista, World Bank etc., I performed analyses and made estimates regarding support for carbon taxes among U.S. adult respondents (%, 2009-2018), actions undertaken to reduce carbon pollution among U.S. adults (%), U.S. individuals' preferences for how to spend carbon tax revenues (%), U.S. adults who say certain proposals would make the biggest difference/a difference (but not the biggest difference) in reducing the effects of global climate change (%), distribution of emissions of greenhouse gases by industry sector worldwide (%), time period during which U.S. individuals believe the net effects of climate change will first have a negative impact on the global economy (%), tax benefits: impact of carbon-pricing schemes (CO2 emissions reduction, 2030 estimate, %/revenue, 2030 estimate, % of GDP), and U.S. individuals who think the government should commit to reducing greenhouse gas emissions (%). The data for this research were collected via an online survey questionnaire and were inspected through structural equation modeling on a sample of 4,800 respondents.

4. Results and Discussion

Instituting a green energy default nudge lowers backing for a carbon tax. (Hagmann and Loewenstein, 2019) Society may be influenced by a carbon tax favorably via features such as the fiscal income governments collect and reinvest into society to assist with problems encompassing climate change. (McLaughlin et al., 2019) As there are conflicting emission reduction targets worldwide, domestic climate policies may be futile in decreasing consumption-based (C[O.sub.2] emissions, that is ones of final demand, consolidated throughout the entire supply chain, and comprising global fractions. (Nabernegg et al., 2019) (Tables 1-8)

5. Conclusions and Implications

By curtailing the perceived economic cost of the tax and reporting the negligible consequence of the nudge, crowding-out is removed without decreasing backing for the nudge. (Hagmann and Loewenstein, 2019) The favorable environmental effect can be catalyzed by energy firms modifying their sources of energy production to renewables and thus reducing their carbon tax bill. The adverse features related to the carbon tax cover how they eventually shape consumers' utility bills via price surges which are likely to concern the neediest in society. (McLaughlin et al., 2019) The success of policies to alleviate consumption-based emissions is dictated by the inconstant connections of the industry (Androniceanu, 2017; Bolton et al., 2018; Bratu, 2018; Cruciani, 2018; Meila, 2018; Mihaila et al., 2018; Mitea, 2018; Popescu Ljungholm, 2018) dealt with by the approaches in addition to the substitution impacts within final demand. (Nabernegg et al., 2019)

Funding

This paper was supported by Grant GE-1577642 from the Center for Economic Performance at CSA, Canberra.

Author Contributions

The author confirms being the sole contributor of this work and approved it for publication.

Conflict of Interest Statement

The author declares that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

REFERENCES

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Cruciani, M. (2018). "Explicit Communication: An Interest and Belief-based Model," Linguistic and Philosophical Investigations 17: 50-70.

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Luminita Ionescu

se_lionescu@spiruharet.ro

Spiru Haret University, Bucharest, Romania

How to cite: Ionescu, Lumini.a (2019). "Climate Policies, Carbon Pricing, and Pollution Tax: Do Carbon Taxes Really Lead to a Reduction in Emissions?," Geopolitics, History, and International Relations 11(1): 92-97. doi:10.22381/GHIR11120194

Received 14 December 2018 * Received in revised form 19 May 2019

Accepted 21 May 2019 * Available online 1 June 2019

doi:10.22381/GHIR11120194
Table 1 Support for carbon taxes among U.S. adult respondents (%,
2009-2018)

      Strongly support  Somewhat support

2009    11                25
2010    10                22
2011    10                15
2012    29                19
2013     6                16
2014    11                23
2015    22                24
2016    25                25
2017    20                27
2018    24                28

Sources: Statista; CLOSUP; Institute of Public Opinion; my survey among
4,800 individuals conducted November 2018.

Table 2 Actions undertaken to reduce carbon pollution among U.S. adults
(%)

Purchased higher efficiency appliances        46.2
Added insulation to my home                   31.4
Planted tree(s)                               22.4
Car pool of use mass transit                  21.9
Bought a smaller or more fuel efficient car   20.4
Pay higher energy taxes to fund
environmental efforts                         19.6
Pay higher taxes for the construction
of mass transit infrastructure                14.2
Installed or purchased alternative energy
sources such as solar for my home             13.3
Reduced or stopped eating dairy products       9.2
Reduced or stopped eating meat                 8.6
Bought an electric car                         4.7
Don't know/Not sure                            3.1

Sources: Saint Leo University; Statista; my survey among 4,800
individuals conducted November 2018.

Table 3 U.S. individuals' preferences for how to spend carbon tax
revenues (%)

Develop clean energy                      77
Improve U.S. infrastructure               69
Assist workers in coal industry           62
Pay down national debt                    54
Reduce Federal income taxes               48
Assist vulnerable low-income communities  42
Help communities prepare and adapt        36
Return $ to all households                33
Reduce Federal payroll taxes              28
Reduce corporate taxes                    26

Sources: Yale University CCC; George Mason University CCCC; my survey
among 4,800 individuals conducted November 2018.

Table 4 U.S. individuals who think the government should commit to
reducing greenhouse gas emissions (%)

Regardless of the actions other countries
have taken thus far                              68
Only if other major emitters enact
policies to reduce their emissions               14
Only if it can enter into a multilateral
emissions reduction agreement with some          11
countries
Only if every country commits to reducing
emissions through a global agreement              4
No opinion                                        1
No response                                       1
Under no circumstances                            1

Sources: NYU Institute for Policy Integrity; my survey among 4,800
individuals conducted November 2018.

Table 5 U.S. adults who say certain proposals would make the biggest
difference/ a difference (but not the biggest difference) in reducing
the effects of global climate change (%)

                                                  The biggest
                                                  difference

Restrictions on power plant emissions             31
Tax incentives to encourage businesses to reduce  27
carbon emissions
Tougher fuel-efficiency standards for cars        22
Tax incentives to drive hybrid and electric cars  14

                                                   A difference, but not
                                                   the biggest
                                                   difference

Restrictions on power plant emissions              52
Tax incentives to encourage businesses to reduce   50
carbon emissions
Tougher fuel-efficiency standards for cars         56
Tax incentives to drive hybrid and electric cars   57

Sources: Pew Research Center; my survey among 4,800 individuals
conducted November 2018.

Table 6 Distribution of emissions of greenhouse gases by industry
sector worldwide (%)

Electricity and heat production   27
Industry                          24
Transportation                    16
Forestry and land use change       9
Agriculture                        9
Buildings                          7
Other energy                       8

Sources: IPCC; World Bank; Statista; my 2018 data.

Table 7 Time period during which U.S. individuals believe the net
effects of climate change will first have a negative impact on the
global economy (%)

By 2025                                   18
By 2050                                   22
By 2075                                    6
By 2100                                    5
After 2100                                 1
Climate change will not have a
negative effect on the global economy      1
Climate change is already having a
negative effect on the global economy     47

Sources: NYU Institute for Policy Integrity; my survey among 4,800
individuals conducted November 2018.

Table 8 Tax benefits: Impact of carbon-pricing schemes (C[O.sub.2]
emissions reduction, 2030 estimate, %

               Carbon tax  Emissions-trading system

India          43          39
China          42          30
United States  28          19
Turkey         22          13
Japan          20          13
UK             19          12

Revenue, 2030 estimate, % of GDP

               Carbon tax  Emissions-trading system

India          3.8         2.3
China          2.8         1.2
United States  1.6         0.5
Turkey         2.1         0.9
Japan          1.5         0.8
UK             1.1         0.4

Sources: IMF; The Economist; my 2018 data.
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