Environmental Sustainability

Carbon Tax and its Implications:

Emissions of carbon dioxide and other greenhouse gases are changing the climate. Burning fossil fuels is relatively cheap until you factor in respiratory disease, floods, lower farm output, and many other effects from the resulting greenhouse gases.

 A carbon tax puts a price on those emissions, encouraging people, businesses, and governments to produce less of them. A carbon tax would raise the price of fossil fuels, with more taxes collected on fuels that generate more emissions, like coal. This tax would reduce demand for high-carbon emission fuels and increase demand for lower-emission fuels like natural gas. Renewable sources like solar, wind, nuclear and hydroelectric would face lower taxes or no taxes. To be effective, the tax should also be applied to imported goods from countries that do not assess a similar levy on the use of fossil fuels.

The Business Side of Carbon Tax:

Revenue generated by carbon taxes could be used for a variety of purposes. A lot of the money should surely be given to households, especially the poorest, through tax credits or direct payments to offset the higher prices they would have to pay for gasoline, electricity and other goods and services because of the tax. Some of the money could be used to invest in renewable energy and public transportation, or to lower other taxes.

On the other hand, it is an added task for companies and governments to actually implement this into their systems. It is estimated that about $1 trillion dollars of profits would be wiped out by the taxes that were agreed in the “Paris Climate Agreement”. This agreement also points to the immense scale of the challenge to curb the effects of climate change and comes as a warning to intensive users of natural resources that their profits are at risk. Such companies, including those in the construction, steel and commodity chemicals sectors, could see profits fall by 80%. The change is not going to be easy, as new companies emerge and traditional ones change or disappear.

However, implementing a carbon tax will have monetary benefits. It can help subsidize environmental programs or be issued as a rebate. Many fans of carbon tax believe in progressive tax-shifting. This would mean that some of the tax burden would shift away from federal income tax and state sales tax, leaving companies in a stronger position. I believe that a transparent carbon tax should be levied that would reduce emissions in a more efficient manner than any strategy developed by bureaucrats in the government. Consumers would respond to a uniform price on carbon emissions by using less energy, and producers by developing technologies to reduce the carbon intensity of the energy that is consumed.

Environmental Sustainability in Businesses:

In recent years there has been a global shift towards more environmentally sustainable ways of working. Companies are not committing to environmental goals out of the goodness of their hearts, and neither should they. The reason for their actions is a simple yet powerful realization that the environmental and economic footprints are most often aligned.

In fact, it is far cheaper to make products and processes environmentally friendly. However, many companies take environmental compliance to be a cost. When companies prevent physical waste, increase energy efficiency or improve resource productivity, they save money, improve profitability and enhance competitiveness. In fact, there are often huge "quick win" opportunities, thanks to years of neglect towards these opportunities.