The current policy tools of CO2 emissions control are not effective.
The globe has warmed over the past 40 years due largely to human activities that raise carbon-dioxide levels in the atmosphere. But most countries, including the United States (the second biggest carbon emitter) and Korea (the ninth biggest emitter and the rate of emission increase is the first among OECD countries), have been reluctant to regulate CO2 emissions because regulations would negatively influence economic activities which are based on fossil fuels.
Trend in CO2 emissions of major countries
| |2000 |2001 |
| |2008 |2009 |2008 |2009 |
|RGGI |61.9 |805.2 |198.2 |2,178.6 |
|CCX |69.2 |41.4 |306.7 |49.8 |
Source : World Bank (2009). State and Trends of the carbon Market
Another policy option-Environmental tax
A carbon tax is a typical environmental tax on emissions of carbon dioxide. This tax can be implemented by taxing the burning of fossil fuels-coal and oil-in proportion to their carbon content. We can classify effects of carbon tax into two cases. The first case is that the tax can restrain the use of carbon consumption by raising the overall cost of fossil fuel. The second case is that the carbon tax can restrain CO2 emissions indirectly by facilitating development of alternative energy. When comparing “carbon tax” with other options I would like to regard the carbon tax as superior to the direct command-and-control regulation and the carbon cap-and-trade system for several reasons
1. A Carbon tax is an incentive-based policy so will result in...