Eunice Chow 1W (11)

Year 2011-2012
What is carbon price?
Carbon price is an administrative approach imposing a cost on the emission of greenhouse gases
which cause global warming. Establishing a carbon price is one of the most powerful
mechanisms available to motivate countries, businesses and individuals to reduce national
greenhouse gas emissions. It also stimulates people to discover, invest and implement renewable
energy technology that does not emit carbon to our atmosphere. On the other hand, placing a
carbon price can act as a disincentive for electricity generators to use polluting coal, gas and oil
fired stations.

Over the last century the burning of fossil fuels like coal and oil has increased the concentration
of atmospheric carbon dioxide (CO2). This happens because the coal or oil burning process
combines carbon with oxygen in the air to make CO2. To a lesser extent, the clearing of land for
agriculture, industry, and other human activities have increased concentrations of greenhouse
gases. The consequences of changing the natural atmospheric greenhouse are critical. A stronger
greenhouse effect will warm the oceans and partially melt glaciers and other ice, increasing sea
level. Ocean water also will expand if it warms, contributing further to sea level rise and human
will no longer have enough place to live.

Therefore, there is an urgent need of establishing a carbon price. Moreover, climate change is a
global problem. Greenhouse gases emitted in one location will affect people in other locations.
For this reason all countries need to be involved. We need a carbon price to stabilize global
greenhouse gas concentrations at levels that limit the risk of severe future climate change
damage. Annual global emissions will need to be reduced substantially in the coming decades.
So paying a price for carbon emissions will slow the output.

However, placing a carbon price will increase the cost of electricity and very likely to decrease
the competitiveness of energy intensive industries. This may result in negative economic and
environmental outcomes. For instance, some companies may move their facilities to places
where there are no climate change policies. This will increase emissions at these new locations
and the system will be useless. Thus, every country has to be involved to work a better
environment.