Intervention Strategies for Air Pollution Summary

Intervention Strategies for Air Pollution
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Intervention Strategies for Air Pollution
Introduction and Review
The intersection between the environment and the economy is manifold: the environment is the source of resources that drive economic growth and acts as a sink for wastes and emissions resulting from economic growth activities (OECD, 2022). The environment is an (almost) closed system because all inputs, except for the sun, are sourced within, and all outputs must remain within. Essentially, economic growth can harm the environment, and where the negative impact persists, economic growth suffers. Poor environmental quality lowers the quality and quantity of resources required to drive economic growth. On the other hand, economic growth can result in solutions that can help enhance sustainable programs.
Current research and policies are centered on how economic growth can be realized with a minimum impact on the environment (Barrage, 2019). The need to strike a balance between optimal economic activities and environmental sustainability is the key driver of current research and policy formulation discussions. A key characteristic of these discussions is the assumption that the environment and economic growth have equal importance on life and must be treated equally, one inclusive of the other. As a result, the world relies on weak sustainability policies, such as the Carbon Tax, because they are the most efficient in quelling disagreements in matters where the environment and economics intersect. While weak sustainability is better than no sustainability, weak sustainability is a poor substitute for a poor environment. The main reason why weak sustainability is preferred is that it is the most politically feasible due to its lack of radicalism. The outcome of weak sustainability, like Carbon Tax, is that it does not address inequality (Haites, 2018). Rather, it only gives the impression that the biggest polluters are paying for reductions. In reality, it is the smallest polluters who suffer the most consequences, from global to household level.
Therefore, there is a need for a fair system that compensates for the fact that wealthy nations emit far more carbon than developing nations who suffer the most from the impacts of global warming and climate change. A carbon tax is a fee imposed on the carbon contents of different types of fossil fuels by factoring in long-term social costs of emissions. A key question in this policy is who should be taxed? The point of taxation could be the energy producers (upstream), distributors and retailers (midstream), or the consumers (downstream) (Barrage, 2019). While the current Carbon Tax policy focuses on the upstream, the burden trickles downstream to the consumers, which is regressive because it only widens carbon inequality. While carbon tax seeks to reduce emissions by forcing companies to adopt sustainable production methods, it interferes with profits and economic growth.
Carbon tax increases the prices of basic products like food and utilities and slows down economic growth. Like developing nations, poor households spend a higher portion of their income on necessities than middle-class and wealthy households. Therefore, while carbon tax seeks to curb emissions, its outcome is inequality which hinders economic growth. Researchers Corbett Grainger and Charles Kolstad established that the burden of a carbon tax on households at the bottom of the fifth of income distribution is between 1.4 to 4 times higher than the fifth top household (Grainger & Kolstad, 2009). Under the carbon tax, the price per unit of carbon emitted is distributed among the consumers, shareholders, and workers. However, the biggest problem is how to distribute the tax among the income classes to deal with carbon inequality.
The two alternatives to the carbon tax – ETS and agreed emissions target – have both failed to yield the desired results due to the complex nature in which the environment interacts with the economy. In total, at least 40 countries worldwide have an adopted some sort of carbon price, either through direct taxes or through cap-and-trade. In practice, most countries are hindered by politics in adopting prices high enough to spur practical reductions. The efforts have resulted in weak sustainability policies that only play a supporting role in mitigating climate change. According to a 2013 report by NERA, a carbon tax sufficient to reduce emissions by 80% would cause the GDP to be lower by 3.4% than if there were no taxes by 2050, which implies a slower economic growth (Williams III & Wichman, 2015). Therefore, carbon taxes are only practical when their net effect does not drag economic growth, but this results in weak sustainability.
Proposed Intervention
Practical and effective reduction of emissions in the long-term is not feasible under the current weak sustainability policies. There is a need for a more prudent, radical, and practical approach that reduces emissions, inhibits carbon tax inequality, and promotes economic growth. The proposed intervention focuses on the consumer end of the emissions cycle within the current carbo tax policy. Current models theorize that the lag on economic growth produced by a carbon tax can be offset if the carbon tax revenue is used to boost economic activity (Barrage, 2019). However, the paper proposes an intervention where the revenue goes to sustainability rather than economic development. Essentially, the proposed system does not consider economic growth and environmental sustainability as equals.
Rather, environmental sustainability is prioritized over economic growth and development. Recent studies suggest that an economy where carbon taxes are operational can be boosted by cutting other taxes. However, a shift in taxes from capital and labor, such as carbon, reduces the tax system's efficiency, affecting economic activities. Broad-based taxes on income or payroll are more efficient than taxes with narrower bases (Williams III & Wichman, 2015). Broader tax bases make it difficult for individuals or corporates to consider tax distort behaviors. A carbon tax is easy to avoid by shifting to clean ene...