Economics and the Governement Essay Example | Topics and Well Written Essays - 2500 words

economic science and the Governement - Essay ExampleThe government has therefore developed a very extensive and comprehensive computer program which seeks to achieve a clean energy future. In a way, the Bill is very clear and concise both from an environmental and economic perspective. The development of this bill was basically a response to the growing aid over climate change especially by international bodies. It is nevertheless realized that Australia is responsible for simply 1.5% of the total Greenhouse gas (GHG) emanations in the world. However, on scientific grounds, this is not a justification for a slow approach in addressing climate change. In any case, the effects of global warming volition be realized by all countries irrespective of their contributions to the whole problem. As such, governments across the world confuse been enacting such legislation to ensure a reduction in GHG emissions. Australia is one of the largest CHG per capita emitters which create an eve n great need for the sylvan to enact and implement a amount of domestic legislation ge bed towards mitigating emissions (Lockie, 2012). nose tooshiedy Price The bill established a fixed carbon price of $23 per ton which waterfall squarely on some of the largest GHG emitters from 2012 to 2015 after which the price of carbon go forth basically be plastic through a trading scheme with the marketplace forces being the biggest price determinants. As a impart of the increase in the price of carbon, there is a subsequent increase in the prices of carbon-intensive goods and services. Due to these increases, umteen producers and consumers will be compelled to seek for cheaper alternatives to the carbon-based products. Indeed, according to basic economic theory, there must be a great reduction in the consumption of carbon based products as long as substitutes are available. In a way, this scheme is very successful since the government sets a limit to the annual GHG emission which ca n always be achieved (Considine, 2012). Indeed, the Carbon Price Mechanism (CPM) is important in a deed of ways. Under the initial flexible price model, there is price certainty since most of the affected parties can accurately predict how much the carbon emissions will cost them for the three years period on a lower floor operation. In the same way, all the parties down the supply chain of carbon consumption also pitch a three year period to determine the cost of their emissions. While the initial period focuses on price certainty, the second stage is basically geared towards addressing emission certainty. As such, from 1st July 2015, the government will actually regulate the number of permits given each year so as to cap the countrys net emission. More importantly, considering the few number of permits which shall be granted, they will be auctioned in the market and their prices will therefore be determined by the market forces. With a reduction in the number of permits, compan ies will definitely a sop up motivation to trade the excess permits for profits. Under the CPM, a reasonable entity is one who has an operational control of the facility which is emitting the gasses (Simon, 2011). It is presently estimated that much of the net national emissions results from electricity generation which accounts for 37 percent while industrial fuel consumption accounts for 17 percent. Agricultural and transport have a cumulative