Hesham Saad Al-Sherbiny: Carbon emissions Between taxes and Trade-off

Arabian Steel Industries Technical Advisor

Definition of carbon emissions

Carbon emission is the release of carbon compounds into the atmosphere.

It is simply … “Greenhouse gas emissions”, which are the main contributors to climate change Since greenhouse gas emissions are often calculated as carbon dioxide equivalents, they are often referred to as “carbon emissions” when discussing global warming, which began since the Industrial Revolution, and the increased burning of fossil fuels, which is directly related to increased levels of carbon dioxide in our atmosphere, Hence the rapid increase in global warming.

It can be defined that carbon emissions are the release of carbon compounds such as carbon dioxide and methane into the atmosphere, which leads to global warming.

Carbon Pricing

The phrase “price for carbon” has become well-known as there is growing interest among countries and companies to price carbon pollution as a way to reduce emissions and drive investments to lower emission options, or arguably cleaner technology.

The question here … There are many answers that governments can make to carbon pricing, and they all lead to the same result.

They begin by choosing what is known as the external costs of carbon emissions – costs incurred by the general public, such as crop damage and health-care costs from heat waves and droughts or property caused by floods and sea-level rise – and linking them to their sources through carbon pricing.

There are two options to reduce emissions that can be described as follows:-

First, the imposition of carbon taxes, the “carbon tax”

A carbon tax directly sets a price for carbon by setting a tax rate on greenhouse gas emissions on the carbon content of fossil fuels.

It is different from an emissions trading system … The outcome of the emission reduction of the carbon tax cannot be determined in advance, and conversely, the price of carbon is determined.

Or it can be said that there are fees imposed on companies based on the amount of carbon they emit, as carbon taxes aim to incentivize companies to reduce their emissions by making them more expensive.

There are also indirect ways to price carbon more accurately, such as taxing fuels, eliminating fossil fuel subsidies, and adopting regulations that may include the “social cost of carbon.”

Second, trafficking systems … “Trade-off” for emissions

It is sometimes referred to as an emissions trading system to reduce the overall level of greenhouse gas emissions and allows low-emission industries to sell their additional allocations to larger sources of emissions.

By creating supply and demand for emission allowances, the emissions trading system sets the market price for greenhouse gas emissions.

The cap helps ensure that the emission reductions required to maintain emissions (in aggregate) occur within the pre-allocated carbon budget.

It is also a market mechanism that allows those entities (such as countries, companies, or factories) that emit greenhouse gases into the atmosphere to buy and sell these gases.

Emissions (as permits or allowances) among them.

In 2024, Egypt is expected to start imposing carbon taxes on imported companies and products.

In order to reduce greenhouse gas emissions and promote renewable energy sources..

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