Project #14451 - pollution

This is the name of the news article.

Taxing CO2 Would Help EU Debt Crisis, Former Ministers Say

This is the article:

Several former European finance ministers are proponents of increasing taxes on carbon emissions and fossil fuel consumption as a way of stimulating economic growth, generating government revenues, and reducing carbon emissions. The group, that includes Germany’s former minister of finance Hans Eichel, drafted a letter to the current European finance ministers urging them to look for more creative ways to solve Europe’s fiscal woes.

The plan has a number of benefits that include raising revenues. However, perhaps the most important long-term benefit is the overall reduction in carbon emissions that would result from the tax. The current system of trading carbon permits appears to be doing little to reduce emissions since EU carbon credits are currently trading at an all-time low of 5.99 euros per metric ton. Most observers believe the carbon credits could fall even more since the “market is oversupplied.”

The current low price does little to incentivize polluters to reduce emissions. The most cost effective solution is the buy the carbon credits and postpone conversion to newer cleaner manufacturing technologies.

Taxing carbon emissions and the consumption of fossil fuels would help Europe overcome its sovereign-debt crisis and help protect the climate, said four former ministers including Hans Eichel, Germany’s minister of finance from 1999 to 2005.

“As European finance ministers meet today in Brussels, they should be thinking more imaginatively about their fiscal options than they have done in the past,” the former ministers said in a letter dated yesterday and addressed to current ministers. “Carbon and energy taxes can produce better economic results than conventional taxes, as well as helping to cut emissions.”

Changing taxes on fossil fuels could raise more than 16 billion euros ($20 billion) a year inSpain, Poland and Hungary alone by 2020, according to a report published today by Vivid Economics prepared for Green Budget Europe, an environmental lobby group in Berlin. Revenue from carbon and energy taxes could cut Spain’s budget deficit by 15 percent a year by the end of the decade, according to the report.

Poland on March 9 vetoed tighter greenhouse-gas targets for Europe. EU carbon permits fell to a record 5.99 euros a metric ton on April 4, on speculation the market is oversupplied. According to a forecast by Bloomberg New Energy Finance, the market will have a 10 percent surplus in the five years through 2012.

Stimulating Growth

“National debt is a millstone round the neck of every European economy and governments need to raise revenue to pay off debt and reduce deficits,” Eichel said today in an e-mailed statement. “Until now, the political answer has been austerity, but thankfully the debate is now moving towards measures that will stimulate growth, rather than just reduce spending.”

The letter to finance ministers was co-signed by Yannis Palaiokrassas, former Greek minister of finance, Dr. Josef Riegler, former Vice-Chancellor of Austria, Dr. Martin Bursik, former deputy Prime Minister of the Czech Republic, and Franz Fischler, former European Union commissioner for agriculture and fisheries.

 

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My assignment:

 

Find a news article Share how it applies to the chapter. 

  1. How are carbon credits used to reduce pollution?
  2. How would the tax proposed in the article reduce emissions?
  3. What is a negative externality and how does it relate to this topic

 

 

This has no word limit it just has to be summarized and answer the questions.

Subject Business
Due By (Pacific Time) 10/15/13
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