To tax or not to tax: Alternative Approaches to Slowing Global Warning - Essay Example

The article written by Nordhaus (2007) proffered issues pertinent to an examination of coordination of policies designed and implemented by various countries with the aim of slowing global warming. As averred, “the analysis focuses on such issues as the relationship to ultimate targets, performance under conditions of uncertainty, volatility of induced carbon prices, the inefficiencies of taxation and regulation, potential for corruption and accounting finagling, and ease of implementation” (Nordhaus, 2007, p. 26). With international organizations monitoring the effects of climate change, Nordhaus disclosed that in conjunction with their regular evaluation is the review of climate change policies particularly focusing on the period 2008 up to 2012.

From the results of the research, the findings indicate that from various proposed interventions to slow global warming, the price-type approach of imposing carbon taxes have proven to be most advantage to achieve the desired goals. Description of Arguments The author clearly classified global warming as belonging to the special type of economic activity classified as global public goods (Nordhaus, 2007, p. 27). Starting with a discussion of policies for global public goods, Nordhaus emphasized that “what makes global public goods different from other economic activities is that there exist only weak economic and political mechanisms for solving these issues efficiently and effectively” (2007, p. 28). . 28). With this in mind, the author delved into a discussion of various mechanisms to deal with global public goods such as (1) noncooperative, market-based or laissez-faire approach; (2) aspirational or hortatory agreements; (3) specific and binding treaties; (4) agreements in international institutions; and (5) limited delegations of regulatory or fiscal authority to supranational bodies (Nordhaus, 2007, p. 29). After evaluating the major issues in global climate change, the price approach mechanisms in comparison with quantity and hybrid approaches have finally indicated that “using tax approaches rather than quantity-type approaches will help promote a more efficient collection and recycling of the revenues from the carbon constraints” (Nordhaus, 2007, p. 39). The author’s arguments support that through the imposition of taxes there are implications on raising prices of other public goods.

However, as contended, due to the revenues collected from carbon taxes which are siphoned back to the economy in terms of reduction of taxes on other goods or inputs, there would not be any costs of inefficiency or deadweight loss as initially perceived. Personal Points of View When one tries to grasp the veracity of the author’s arguments, I am convinced that Nordhaus’ contentions are valid in slowing global warming through imposition of policies on carbon taxes. However, the points of objections to its implementation are likewise worth considering in terms of difficulties in monitoring and enforcement and obtaining data on tax rates of different countries, among others.

Despite the objections, the move towards determining a more plausible and viable