Essay on Coverage and Implementation of the Policy: Industries That Use Fossil Fuels

The current worlds climate is changing rapidly due to the effects of emission in the form of carbon (iv) oxide, and other harmful greenhouse gases. This has, in turn, attracted attention of various environmental institutions across the globe, which have focused on instituting policies that will reduce such emissions. For instance, the International Carbon Action Partnership and the United Nations Framework Convention on Climate Change, have established the Carbon Policy to reduce the number of emissions into the atmosphere (Powel, 2010). Canada has committed to the implementation of these policies, where, states such as Quebec, Ontario, and Alberta have enacted these programs. The approach comprises of a carbon tax: a form of pricing levied on the amount of carbon content released in the process of burning fuels. This limits the combustion of hydrocarbons such as natural gas, petroleum, and coal. Therefore, a carbon tax has been instituted to limit the release of such substances into the atmosphere.

The policy affects industries that use fossil fuels in their operations and households, which depends on the amount of energy used and the participants driving patterns, and the public transport sector (Powel, 2010). For instance, in Quebec, gasoline is taxed $ 0.008 per liter consumed, which translates to $3.50 per every tone of carbon dioxide emitted. Such contributions are channeled to the Green Fund to facilitate the implementation of the action plan on climate change. Additionally, in Alberta, a tax of $15/tonne is charged and transferred to the Climate Change and Emissions Management Fund. This was meant to limit industries that release volumes exceeding 100,000 tons of CO2 annually (Alberta, 2018). These institutions include the coal electricity generation plants and oil companies. However, in the three states, implementing the carbon levy tax in Canada, the agricultural sector is exempted from these charges, and is encouraged to utilize marked diesel and gas.

A detailed framework is put in place in these provinces to allow efficient accountability on each amount of emission into the atmosphere. For instance, the Alberta administration administers these levies at the gas station, and on electricity bills, in the form of additional taxes on the number of units of gasoline or heating energy consumed in a specific period of time. Additionally, provinces like Quebec, Ontario, and Alberta have instituted a mandatory requirement for firms and households to report the volumes of pollutants released into the atmosphere (Quebec, 2018). This has enhanced transparency, and also installed a sense of responsibility on companies to reduce the number of harmful gasses released into the air. However, since not all provinces in Canada have implemented the Carbon Policy, the administrations of Quebec, Ontario, and Alberta, have teamed up with the Western Climate Initiative, which offers management and technical support to other regions that are willing to implement this program within their boundaries. Additionally, the Western Climate Initiative is involved in the formulation of cap-and-trade systems, which install carbon tax on products imported from regions that have not initiated this program. This ensures that other willing participants are welcome, and those that have not implemented the policy compensate for the efforts made by these provinces.

The Mechanisms and Institutions Involved in the Implementation of the Policy

The administration of the three provinces has established a systematic approach, where, a maximum level of annual greenhouse gases is set. These limits are lowered progressively after every year. The targeted companies are then required to acquire the specified fines charged for every ton of CO2 released into the atmosphere. The administration considers industries that have stiff competition nationally and internationally, and are allocated additional emission limit. Once an enterprise reduces its greenhouse gas emission amounts below the set limit, they can sell the excess units to the carbon market to assist the firms that have exceeded their allocated units. The administration reduces the number of free units awarded to such companies, to act as incentives to trigger them to invest in additional efforts to reduce the volume of harmful gasses emitted (Alberta, 2018). Thus, the establishment of the carbon market acts as the fiscal tool that facilitates both economic growth and reduction of global warming. Additionally, provinces such as Alberta have developed a comprehensive framework that ensures that the levies are applied at the gas stations and the relevant firms collecting heating bills. Such a mechanism has made sure that all participants and greenhouse gases emitters are held responsible.

The carbon policy utilizes an upstream program to ensure it completes actualization. It involves the utilization of policies and regulations, which requires the enactment of incentives to facilitate reduction of the greenhouse gasses released by either the households or industries. These plans were aided by international and national institutions, which were established after the classification of global warming as an emerging issue in the world. For instance, the Quebec administration has partnered with the International Emissions Trading Association, which is a non-profit enterprise, facilitating the enactment of a global carbon market. This promotes the involvement of the private sector in the trade, thus controlling the pollution volumes. The Canada Revenue Agency has also been instituted to oversee the payment of rebates in Alberta.

Moreover, after the provinces had committed themselves to implementing the Carbon Policy, new institutions were established, which collaborated with the organizations stated above to ensure that the implementation and sustainability program is conducted efficiently. For instance, Quebec formed the Western Climate Initiative, which aimed at facilitating the enactment of the cap-and-trade, with its neighbors such as California. Additionally, the International Zero-Emission Vehicle Alliance has promoted the adoption of green cars to aid the achievement of targeted emission volume. This alliance was established in 2015, after Quebec, Ontario, Alberta, and other eleven regional and national governments agreed on the formation of the coalition that will regulate and encourage the production of green vehicles, to help reduce emissions released into the atmosphere via fuel combustion from cars. The regional governments enhanced the implementation of the already established institutions, and also proposed the establishment of new ones to ensure an efficient implementation process for the carbon policy. The newly formed bodies acted as supporting framework to the earlier international and national enterprises.

Incidence of the Policy

The institution of the carbon policy will directly increase the cost of fossil fuel combustion, and coincidentally the prices of the related goods or services. For instance, in Quebec, the administration administers a fee of $3.5/ ton of carbon dioxide released. This means that each gallon will cost 3.15 cents more, and this would increase the cost of electricity, and in turn increase the prices of the commodities produced by such an industry (Quebec, 2018). Thus, in the efforts of reducing environmental pollution, the administration may end up increasing the cost of living in the economy.

Additionally, carbon-intensive companies will be affected significantly by the enactment of the carbon tax law. More so, regions that rely on carbon-intensive fuels such as coal will also be affected negatively. Once the fee is applied, it will increase the cost of operation such that the additional fees charged by the administration, will be transferred to the consumers. In other cases, companies that rely on fossil fuels will be forced to pay more in the form of carbon tax, thus reducing their profit levels. This may lead to lay off of some employees, or eventual closure of the firm due to unsustainable cost of production. Therefore, it will, in the long run, lead to an increased rate of unemployment in the affected economy.

Alternatively, the institutionalization of the policy will reduce the consequences of global warming across the world. Through joint efforts, the participants in the industrial and household sector will be able to combat climatic change. This is seen as the ultimate achievement of the initiative, and its success in provinces such as Quebec, Ontario, and Albert, will encourage other regions to adapt and implement such measures. This would minimize the amount of greenhouse gases released into the atmosphere and consequently, control environmental pollution across the globe. Moreover, the actualization of the carbon tax plan will cost the poor households a more significant share of their income as compared to the wealthier population. The low-income homes are associated with consumption of energy-intensive products as compared to the more affluent families. Thus, since the tax will be regressive, the poor will lose a higher portion of their income as compared to the wealthy individuals.

Carbon levy collected can be utilized in diversifying the Canadian economy. For instance, the Climatic Leadership Plan has collected revenues summing up to $5.4 billion. These funds were used to improve the household status through the issue of carbon rebate. Such income is used to enhance the quality of life for the regions population. Additionally, the funds are invested in promoting energy efficiency (Ontario, 2018). For instance, in Alberta province, $566 million was spent in the establishment of Energy Efficiency Alberta, which will support business and household efficiency programs and services. Finally, such funds are utilized to promote community transition from indigenous practices to cleaner approaches such as adoption of energy efficient transit buses. References

Alberta. (2018). Carbon levy and rebates. Alberta.ca. Retrieved 6 February 2018, from https://www.alberta.ca/climate-carbon-pricing.aspx.

Ontario. (2018). Cap and trade in Ontario. Ontario.ca. Retrieved 6 February 2018, from https://www.ontario.ca/page/cap-and-trade-ontario.

Powel, D. (2010). What the new CO2 tax will mean. Moneyweb Network. Retrieved 6 February 2018, from http://www.moneywebtax.co.za/moneywebtax/view/moneywebtax/en/page259?oid=51312&sn=Detail.

Quebec. (2018). The carbon market, a green economy growth tool! Mddelcc.gouv.qc.ca. Retrieved 6 February 2018, from http://www.mddelcc.gouv.qc.ca/changementsclimatiques/partenariats-en.asp.