On December 11, 1997 the leading industrial nations of the world gathered together to do something about the atmospheric carbon dioxide, methane, nitrous oxide, and sulfur hexafluoride levels present. These four greenhouse-gases, according to some scientists’ beliefs, pose a threat to future climate shifts if the world fails to act. Since December of 2007 many other nations joined the efforts initiated by the Kyoto Protocol, hoping to make the environment a cleaner place. The Kyoto Protocol consisted of an international movement to try and get industrialized countries to cut down emissions. Although some scientists tend to make a big deal out of the term global warming, we must keep it in perspective and look at it through a policy analysis perspective. In stating industrialized nations require a more effective method of measuring greenhouse-gas emissions, the author of “Up in the Air” overlooks the assumptions that one, government policies are the best tool for limiting emissions and two, their methods can be enforced. Greenhouse-gas emissions cannot be pinpointed to a single source for certain; therefore governments must focus on offering market incentives to reduce emissions rather than policies aimed to police the environment.
When addressing such a policy problem as greenhouse-gas emissions, one must first examine the different agents through which the problem can be solved. The author of “Up in the Air” assumes this to be government along with scientists. Greenhouse-gases stem from manufacturing plants, agricultural methods, and virtually any other everyday activity such as driving a car. These emissions also heavily concentrate around large cities, making this a more regional issue. The founding fathers addressed these types of issues in the Constitution, delegating them to the states governments. Following this logic the national government would leave greenhouse-gas emissions alone and the governments of states containing large cities could develop their own policies. States such as Montana and Wyoming with little populations would not be subject to the same rules and regulations as states such as California or Michigan. Another assumption is that the problem of greenhouse-gas emissions is even a problem at all. There is so much speculation in regard to the effects on the environment that we must question exactly how important it is and its location on the national agenda.
Let us for a moment assume that greenhouse-gas emissions become a serious enough problem for government to intervene and develop some sort of policy solution to limit the environmental effects. We must now examine how the policy will be enforced and even if it can be enforced. Should the government utilize existing agencies such as the Environmental Protection Agency or should government develop an entirely new organization to try and enforce the policy choices? The government could also contract out to a third party company who would handle corporate dealings and enforcing the policy. We must examine the costs and benefits of each decision. The government simply cannot afford to police every single organization contributing to greenhouse-gas emissions.
In order to cut down the greenhouse-gas emissions of a certain company one must be able to pinpoint the location from where the emissions in the atmosphere came. This would be impossible even with constant monitoring of all corporations. There would still be greenhouse-gas emissions into the atmosphere. To only police some of the sources and not others does not seem fair. Not only would this task be impossible, but the cost just does not seem justifiable for the minimal progress.
The argument throughout “Up in the Air” focuses primarily on policing the greenhouse-gas emissions. The best solution lies not in policing and trying to punish the sources of greenhouse-gas emissions but rather to offer incentives for those sources to reduce their emissions. The primary methods of policing emissions consist of such things as a cap and trade policy or an emissions tax. The cap and trade policy is where the government sells permits to certain companies in exchange for them to essentially emit greenhouse-gases to a certain level. These permits can be traded amongst companies but those that do not receive the permits are not able to compete in certain industries that might lead to some emissions. An emissions tax also prohibits market competition and provides difficult startup costs for smaller companies. The large corporations that can afford to pay the emissions tax when exceeding a certain level of greenhouse-gas emissions will pay the tax because they will more than make up from it in profits from the units produced. Smaller companies trying to start up do not have the assets to compete by going over the emissions cap and paying the tax. Neither the cap and trade methods or emissions tax effectively prevent and limit greenhouse-gas emissions. Not only do they fail to do this but also inhibit the market structure upon which our economy is built.
According to the analytical work of D.W. South, R.F. Kosobud, and K.G. Quinn, researchers at The University of Chicago’s Argonne National Laboratory, emissions taxes and a permit system inhibits the potential market growth. Their analysis takes base in economic principles such as supply and demand, taxes’ effect on the market, and other micro and macroeconomic indicators. When looking to establish long-term growth in the industry, cap and trade permits fall short. Offering grants or tax breaks to corporations and small businesses for limiting greenhouse gases gives the company an incentive to try and meet a lower level of greenhouse-gas emissions. This encourages companies to research and develop new greener technology and methods of manufacturing. Market incentives provide a much stronger incentive for a company trying to limit greenhouse-gas emissions than trying to police them through taxes and permits. Offering an incentive leads to economic growth as well as a cleaner environment.
Changing policy mindset from policing to encouraging allows for essentially both sides of the argument to come out better. The environment is still better off due to the incentive to limit greenhouse-gas emissions and small businesses are encouraged. We must move towards this type of approach to not only greenhouse-gases but other policy areas as well. As globalization becomes more of a role in international policies and trade, we must aim to promote economic growth and sustainable methods rather than utilizing inhibiting policies and regulations to achieve our goals.
“Commentary: Cap and trade not the solution.” The Colorado Business Journal. 11 Dec 2009. http://www.allbusiness.com/science-technology/earth-atmospheric-science/13588183-1.html
D.W. South, R.F. Kosobud, and K.G. Quinn. “Greenhouse Gas Emissions Control by Economic Incentives: Survey and Analysis.” 18-20 Nov 1991. http://www.osti.gov
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Gilbert E. Metcalf and John M Reilly. “Policy Options for Controlling Greenhouse Gas Emissions: Implications for Agriculture.” http://web.mit.edu/ceepr/www
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“Up in the Air.” Nature 465. 5 May 2010. http://www.nature.com/nature/journal/
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