Volume : III, Issue : VII, July - 2014

Economic and Market based Measure of Global Warming: Light and Shadows

Nanda Dulal Hazra

Abstract :

All we are facing the unfavourable effects of Global warming. And Global warming is happening for over existence of Green House Gases (GHGs) in the atmosphere. For reducing these GHGs there are two types of mechanism one is Carbon tax which comes under Tax or price based mechanism and Cap and Trade comes under Market based mechanism. Carbon tax may be defined as imposition of the tax on the carbon content or emission potential of the fuel consumed. And in Cap and Trade Govt. will fix up a quota or cap on the total emission that can be made by all the GHGs emitter and this will be distributed among all the emitters. Considering the quota and actual emission of the emitter surplus or deficit quota will be traded among the emitters in exchange of currency. Both the mechanisms have some advantages and disadvantages but the objective of both the mechanism is to reduce the global warming by reducing the emission by imposing some cost on emission of GHGs. The objectives of the paper are to identify the relative impact of Carbon Taxation and Cap and Trade on GHGs emission reduction and associated advantages and disadvantages of both the mechanisms. Considering all aspect of both the mechanisms cap and trade may be consider as better mechanism but the effectiveness of the mechanisms depends how the mechanism is designed.

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Article: Download PDF   DOI : 10.36106/ijar  

Cite This Article:

Nanda Dulal Hazra Economic and Market based Measure of Global Warming: Light and Shadows Indian Journal of Applied Research, Vol.4, Issue.7 July 2014

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