Will Restricting U.S. Carbon Emissions Damage the U.S. Economy?

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Angel Houston
May 2, 2012

Will Restricting U.S. Carbon Emissions Damage the U.S. Economy?

An important issue affecting the world today is climate change due to the increase in the amount of greenhouse gases that is released into the atmosphere. Greenhouse gases are gases that accumulate in the atmosphere due to human activity and the earth's natural biological and chemical processes. The four major greenhouse gases are carbon dioxide , methane, nitrous oxide, and fluorinated gases (U.S. Environmental Protection Agency, 2011). The main contributing factor to climate change is the abundance of carbon dioxide in the atmosphere. Due to the burning of fossil fuels, solid waste, trees, and other chemical reactions carbon dioxide is absorbed into the atmosphere enhancing the greenhouse effect.

Carbon is an element essential to all living things on Earth. It undergoes two cycles that are necessary to stabilize the environment: the biological carbon cycle and the geological carbon cycle. In the biological carbon cycle, carbon is absorbed in plants and the inorganic carbon is converted to its biological form through photosynthesis via plants and phytoplankton ("Carbon cycle," 2008). During respiration, carbon dioxide reenters the air after being broken down for energy (ATP) carbon dioxide gas. Carbon that remains in the oceans sink are buried into the earth's crust. When humans extract oil and coal for energy usage the byproduct carbon dioxide is released affecting the geological carbon cycle. The biological cycle is affected in two ways. When forests are cleared for land usage, the burning causes a release in carbon dioxide and the cleared land can no longer assist in the process of photosynthesis or the removal of carbon dioxide from the atmosphere ("Carbon cycle," 2008).

Since the Industrial revolution, large amounts of carbon dioxide have been released and continue to be released in the atmosphere. With the decrease in forests and continuation of the burning of fossil fuels, earth's biological processes cannot convert and replenish the carbon at the rate that carbon dioxide is accumulating. To decrease carbon emissions, the U.S. Government as well as other world organizations are trying to create policies that will reduce carbon emissions through some methods such as the cap and trade system and carbon taxes. The goal is to reduce carbon emissions to a level that is sustainable and also causes a decrease in the rate of climate change.

The implementing of a cap and trade system and/or carbon taxes in the U.S. would have dramatic effects on our economy and our way of life. The biggest impact would be felt by the consumers and the manufacturing sector. The manufacturing sector would experience a decline in demand for the products and services. While the consumers will be expected to pay the costs of the taxes and many will become unemployed due to companies transferring their plants offshore.

One method being discussed to decrease carbon emissions is to enforce carbon taxes. Although carbon taxes would be efficient in reducing our nation's carbon emission, complications would also arise. The carbon tax that businesses would have to pay to manufacture and ship their products would be passed down to consumers. As the price of goods and services rise consumers will spend less money on domestic goods and begin to purchasing imported goods. As the demand for high energy products and services decreases, businesses will look for energy substitutes leading to counterproductive activity. In the example given by (Lippke & Perez- Garcia, 2008), wood is used as a substitute. As the piece and demand for wood increases, the timber industry has to compensate for the demand leading to an increase in deforestation causing an increase in carbon emissions. Another disadvantage with carbon taxes is that no cap or maximum limit of carbon missions is set (Metclaf, 2009). The ideology is solely dependent on how much an industry is...
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