The Kyoto Protocol

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In 1998, Dr. James Hansen, director of the NASA Goddard Institute of Space

Studies, testified before the U.S. Congress that “the greenhouse effect has been detected and it is changing our climate now.” His statements made internation headlines which lead to increased public awareness of climate change—making it a salient issue for the general public. In response to public concern and what climatologists had known for years, the United Nations and other international bodies established policies to limit the emission of green houses gases. International agreements established by the United Nation’s Kyoto Protocol and European Union Emission Trading Scheme (EUETS) attempted provide monetary incentive to reduce greenhouse gas emissions through the establishment of carbon credit program and artificial carbon trading markets.

Under the Kyoto Protocol countries are allocated carbon credit to emit specific quantities of greenhouse gases based on previous emission levels. The nations they divide the credits among their emitters and industries with deficits can buy the surplus credits to ensure they meet their emission requirements. Through demand and supply of credit, a monetary value for carbon pollution is established. This cost will, in principal, motivate polluters to develop technologies and modify practices to limit carbon emission. However, many critics of the of policy believe it ineffective and state “nothing less than a reorganisation of society and technology that will leave most remaining fossil fuels safely underground.” [Lohmann, 2006] The industries which are most reliant on fossil fuels and are the largest contributors to global warming will require the most expensive long-term structural changes, and therefore are le...

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...om instability as the supply of carbon credit is highly inelastic.[ Nordhaus, 2007 ] As demonstrated by William Nordhaus in his 2007 article on carbon taxing, a HICT is “more easily and flexibly integrate economic costs

and benefits of emissions reductions, whereas the approach in the Kyoto Protocol has no discernible connection with ultimate environmental or economic goals.” The revenues from the tax can allow government to invest in large scale clean energy projects and invest in green technologies. It is clear from the failures of CDM that industry cannot be responsible for investing in these tasks. The harmonized tax solution, unlike the placebo policies Kyoto Protocol, treats the major cause of global warming by providing of stable monetary incenstives for emission reduction and will provide gonerbments with the nessary resources to fund clean energy reform.

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