Background
Today, the world is confronted by the most challenging problem ever, Global warming. Global warming is now a reality and its impact are already being felt across the global (Leroux,2006). Take climate change for example. Over the recent years, the whole world has experience drastic and dangerous climate change ever which has been caused by global warming (Myers, Maibach, Roser-Renouf, Akerlof & Leiserowitz, 2013). For example, Sea level is increasing everywhere putting people at risk of flooding and hurricane. Summer temperature have become hotter and prolonged leading to drier forest which in turn increases the chances of wildfires. Weather has also become dangerous hot, leading to destruction of forest and as well as cause famine and drought especially in countries that relies on agriculture (Linden, 2006). In addition, due to global warming, the air has become so polluted putting public health at risk of diseases such as cancer, asthma among others (Neidell, 2004). There is agreement among all scientists and environmentalist that the leading causes of global warming is carbon emission. Therefore, to address the threats posed by global warming, solution to the problem of carbon emission is much needed globally. Although good solutions such as encouraging use of renewable energy among others have been suggested and implemented, they have not be able to address the problem of carbon emission in a large scale (Dincer,2000). A lot carbon is still being emitted to the environment by vehicles, industries and other human behaviours. Unless drastic measure is take, more carbon will still be emitted into the environment because, as of today, it absolutely free to pollute.
Thesis
Putting a price on carbon emissions is the most viable and effective way to reduce greenhouse gas emissions and mitigate climate change.
Issue 1
It has been argued that pricing carbon will have negative impact on economic growth. According to the Institute for Energy Research (2009), pricing carbon will only lead to lower energy use which mean lower economical output simply because the carbon replacement energy sources are readily available.
Although the opponent of pricing carbon claim such policy will have negative impacts on the economy growth, their argument is far from the truth. Their argument is based on the assumption that alternative low-carbon energy is not substantially available or will remain to be costly therefore leading to lower energy use or increase in energy expenditure which will negatively affect economy. This assumption is not correct because there are a lot of non-fossil energy sources low on carbon that have remain underutilized for years. These sources include Hydroelectric, nuclear, solar, geothermal, wind among others (McLamb 2011). Recent data show that in year 2015, clean energy represented 58.5 percent of net additional to global energy supply and it is estimated that by year 2021, 42% percent of global energy supply will come from non-fossil fuels source( REN21, 2015). This clearly indicates that clean energy is readily available and has the potential to meet global demand for energy. In fact some countries such as Germany have embraced clean energy to point where 74 percent of its electricity now comes from renewable energy (Hill, 2014).
Contrary to what opponent say, pricing the carbon will not affect consumption of energy and economy in any negative way. In fact, by pricing the carbon, it will become unattractive to invest in fossil fuel energy in favour of Non-fossil energy sources including solar, wind among other. Again, pricing the carbon will stimulate innovation on low-carbon energy technologies leading to abundance in supply of clean energy (Geels, 2012). This is well captured by a recent World Bank report (2016) which shows that since the debate on pricing carbon emerged, innovation on low-carbon energy technologies has been on the rise leading to a 25 percent increase in supply of clean energy in year 2015.
Issue 2
It has also been argued that pricing carbon will greatly affect low income families as they spend most of their income on energy (Grainger and Kolstad 2009). According to Grainger and Kolstad (2009) pricing carbon will increase the cost of energy which means the lower income families will spend even a higher percentage of their income on energy making them poorer.
Although this argument may be seen as true due to the fact that energy from fossil fuel is relatively cheaper than those from non-fossil fuel sources at the moment, it is based on the assumption that the price of clean energy will remain relatively high even when produced on large scale. This assumption is not correct as evidences has shown that large scale production of clean energy decrease the cost significantly to a point whereby in some regions the cost is now almost equal to that incurred generating energy from fossil fuel (IRENA 2015).
Contrary to what Grainger and Kolstad (2009) and other critic of clean energy argue, pricing the carbon will not make people poorer. It will only make dirty energy to become more expensive and this will stimulate investment and innovation in low-carbon technologies. As investment and Innovation in non-fossil energy sources increase, it is becoming cheaper to produce energy that is free from carbon (IRENA 2015). For instance, Investment in solar and wind plant in Mexico and Morocco has already shown the sign of producing the cheapest electricity in the world (Randall 2016). It is therefore wrong to argue that pricing carbon will have negative economic impact on the low income families. In fact, if the clean energy project in Mexico and Morocco is anything to go by, the opposite will be true in the long run. Energy will become cheaper and the low income families will even spend smaller percentage of their income on energy.
Conclusion
In conclusion, pricing carbon give the world a good opportunity to curb global warming by reducing the amount of carbon emitted to the environment. It not only give the world the opportunity to discourage continued investment in fossil fuel-base energy sources in favour of non-fossil fuel energy sources but it also present an opportunity to encourage decarbonise the energy. Therefore, the economies both developed and developing should introduce carbon pricing policies in form of tax or any other available option to tackle the global warming.