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Paying for environmental damage

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Tackling climate change is one of the key issues at the G8 summit, with much talk of targets and global treaties. And companies will play a key role in reducing greenhouse gases. Most experts believe that some sort of market mechanism will need to be developed to encourage them to curb their emissions of C02.

 

There exist some quite different models to price such emissions: one of them is a carbon tax system.

 

This proposal is simple - impose a levy on polluters based on the amount of emissions they release. This is often known as a carbon tax, though in theory it could also apply to other greenhouse gases. The money raised from the tax could then be channelled to research and develop low-carbon technologies and clean energy.

 

The idea is that polluters, such as large power firms, are encouraged to reduce their emissions, while entrepreneurs can be encouraged to develop alternatives.

 

Businesses often insist that the biggest hurdle is unpredictability - it makes managing risk or plan investment difficult. The benefit of a carbon tax is that firms and investors can plan ahead.

 

Another benefit is that money raised can be collected by the government using the existing tax system.

 

But critics say such a tax is too blunt an instrument, and simply punishes certain sectors. If, for example, a power firm has already significantly reduced its emissions, then the easiest available way to make further cuts might simply be to reduce output.

 

Some argue that a carbon tax would be politically difficult to pass, because of resistance from industry and strong lobby groups. Moreover, once the government has collected the tax, there would be no guarantee that it would spend it in the best way to encourage cleaner technologies.

 

Proponents, meanwhile, say by dint of being universal it is not subject to the same pressures of handing out carbon credits.

 

But faced with another tax, some critics believe polluters might simply pass on the cost to consumers rather than actually reducing emissions - though this would only work if consumers remained loyal despite rising prices.

 

Moreover, once the government has collected the tax, there would be no guarantee that it would spend it in the best way to encourage cleaner technologies.

 

The main alternative to the carbon tax proposal is the cap-and-trade system.

Firms either opt to reduce their emissions directly - or they can buy the right to keep polluting. The idea of a cap-and-trade model to tackle pollution goes back several decades. In the 1970s the US Environmental Protection Agency established a scheme to trade sulphur dioxide and nitrous oxide to tackle acid rain.

 

· EU must cut emissions by 8% from 1990 levels by 2012.

· Each nation agrees to a National Allocation Plan with the European Commission.

· ETS covers about 40% of the EU's total CO2 emissions, including large polluters.

· By 2012, all flights within, to and from EU will be covered.

 

Today, there is only one scheme - the European Trading Scheme (ETS) started in January 2005 - that obliges firms in selected sectors to meet binding carbon emissions targets. Industries in the ETS include power generation, iron and steel, glass and cement. About 40% of the European Union's total CO2 emissions are covered by the scheme.

(from BBCNews.com)

Task 3. Answer the following questions.

 

1. Why will companies play a key role in reducing greenhouse gases?

2. What is a ‘carbon tax?’ What is the general idea of a carbon tax?

3. What are the benefits of a carbon tax?

4. What are the weak points of a carbon tax?

5. Why do some people think that a carbon tax would be politically difficult to pass?

Task 4. Match the words from the text with their definitions.

 

1. treaty 2. curb 3. entrepreneur 4. emission 5. punish 6. encourage 7. hurdle 8. tax 9. tackle 10. target 11. benefit 12. output   a. a person who makes money by starting or running businesses b. to make a determined effort to deal with a difficult problem or situation c. something that is sent out into the air d. a formal agreement between two or more countries e. an advantage that something gives you f. to make somebody suffer because they have broken the law or done something wrong g. the amount of something that a person, a machine or an organization produces h. a problem or difficulty that must be solved or dealt with before you can achieve something i. result that you try to achieve j. to give somebody support or hope k. to control or limit something, especially something bad l. money that you have to pay to the government so that it can pay for public services

Task 5. Use the words in sentences of your own. Read some of the sentences to your partner and ask him to translate them.


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