Examining Governmental Policies
Climate change has become one of the most significant issues of our time, with Earth’s temperatures already rising above pre-industrial averages and polar ice caps melting at an unheard-of rate. The United Nations defines Climate Change as a “change of climate which is attributed directly or indirectly to human activity that alters the composition of the global atmosphere and which is in addition to natural climate variability observed over comparable time periods.” In response to the crisis, world governments have developed and implemented a variety of different policies and laws to reduce emissions and limit global warming, as part of an effort to meet the Paris Agreement’s goal of limiting global temperature increases to below 2°C.
In this article, we’ll examine some of the most significant governmental policies related to climate change, discussing their purpose and how they work in theory. We’ll also take a look at some of the potential issues that could arise from implementing these policies, as well as their potential effectiveness in helping to tackle the crisis.
Carbon Taxes
One of the most significant governmental policies that exist to address climate change is the introduction of carbon taxes. Carbon taxes typically involve the government imposing a fee on the burning of fossil fuels, measured in terms of tons of carbon dioxide equivalent. The goal of the tax is to induce producers and consumers to move away from carbon-intensive forms of energy and towards solutions that are less polluting. By making it more expensive to release carbon into the atmosphere, the theory is that this will incentivise businesses and individuals to change their habits and reduce their carbon emissions.
In practice, one of the potential issues with carbon taxes is that they can exacerbate poverty among some parts of the population, generally in developing countries. Further, it’s not necessarily clear how much of an effect the taxes will have. If the penalty is not steep enough, it may not be enough to incentivise companies to switch to greener and more sustainable practices.
Emissions Trading Scorcles
Emissions trading schemes, sometimes referred to as cap-and-trade, are another of the main strategies employed by governments to reduce emissions and tackle climate change. The idea is to limit the overall amount of carbon that can be emitted by creating a cap on the number of permits that allow for the burning of fossil fuels. The permits are then distributed amongst companies or buyers, who can then trade them with each other to control their emissions.
The advantage of such a system is that it puts the economic burden on those who are actually causing the emissions, rather than simply raising taxes on everyone. However, the effectiveness of this system is highly dependent on the nature and implementation of the rules, as well as the number of participants involved. If the permits are distributed too liberally, there may be little or no incentive to reduce emissions, and in some cases, the scheme can be easily manipulated, such as in the case of the EU Emissions Trading Scheme.
Regulations and Laws
Governments can also address climate change by instituting regulations and laws that prohibit certain emissions, or require companies to offset their emissions through investments in green technology or other forms of carbon sequestration. These regulations can be both legally binding and voluntary.
One example of a legally binding regulation is the EU’s Renewable Energy Directive, which requires companies to acquire a certain portion of their energy from renewable sources or face significant fines or even the suspension of their operations. Similarly, the US’s Clean Air Act regulates the total amount of pollution that motor vehicles are allowed to emit.
Voluntary regulations, on the other hand, usually take the form of corporate responsibility programs, in which companies commit to certain sustainability standards. For example, the Aleron Group has a Clean By Design program, which commits member companies to reducing their greenhouse gas emissions in order to reduce their impact on the climate. The UN Global Compact is another example of a voluntary program, in which hundreds of companies have agreed to work towards a set of sustainability goals.
Subsidies and Other Financing Mechanisms
Finally, governments can also implement policies that provide subsidies or other financing mechanisms to help businesses transition to green practices. These subsidies can take many forms, such as direct payments to companies to invest in green technology, loans or grants to cover the cost of making the transition, or tax credits for companies that make significant investments in renewable energy.
These subsidies can be an effective way of providing an economic incentive for businesses to switch to green technology, as it reduces their overall out-of-pocket costs. However, there are some potential issues with using subsidies, as they may end up diverting investments away from existing technologies or economically beneficial practices. Additionally, subsidies can be difficult to manage, as they can be difficult to quantify and require considerable administrative resources to sustain.
Ultimately, governmental policies are an essential part of the effort to combat climate change, as they provide the necessary financial and legal incentives to reduce emissions while ensuring that the burden of the transition to cleaner methods of energy production is shared fairly. Carbon taxes, emissions trading schemes, regulations, laws, and subsidies are some of the most significant strategies employed by governments, though their effectiveness is dependent on the specifics of their implementation and execution. As governments continue to develop and implement new policies to address climate change, it is essential that their approach considers the potential pitfalls of their plans and takes steps to ensure that the necessary investments are made in the most efficient and effective manner.
