A couple of years ago, a global carbon tax seemed far from becoming a reality. However, the introduction of a such a tax now appears to be a possible and viable new instrument for mitigating climate change. The idea has been advocated by heads of international organizations, businesses and professional services firms (including PwC) and lobbyist for big companies (including the Business Council of Australia). Suppose that governments worldwide were to agree to implement a minimum carbon tax of 75 US dollars per tonne of C02 emissions. Further, suppose that you are the CEO of a manufacturer of affordable casual clothing. From this perspective, answer the following questions: Based on the article by Dr Alice Pirlot, explain how you would expect a global carbon tax to change the current laws and regulations that affect your business under the existing international legal framework. Suppose that your shareholders are only concerned with maximising the profits of your business, given the carbon tax. What are the key determinants of how much you will reduce your C02 emissions? What (if any) further measures should your firm take to reduce emissions given the carbon tax? Examine this question from utilitarian and deontological perspectives.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A couple of years ago, a global carbon tax seemed far from becoming a reality. However, the introduction of a such a tax now appears to be a possible and viable new instrument for mitigating climate change. The idea has been advocated by heads of international organizations, businesses and professional services firms (including PwC) and lobbyist for big companies (including the Business Council of Australia).

Suppose that governments worldwide were to agree to implement a minimum carbon tax of 75 US dollars per tonne of C02 emissions. Further, suppose that you are the CEO of a manufacturer of affordable casual clothing. From this perspective, answer the following questions:

Based on the article by Dr Alice Pirlot, explain how you would expect a global carbon tax to change the current laws and regulations that affect your business under the existing international legal framework.
Suppose that your shareholders are only concerned with maximising the profits of your business, given the carbon tax. What are the key determinants of how much you will reduce your C02 emissions?
What (if any) further measures should your firm take to reduce emissions given the carbon tax? Examine this question from utilitarian and deontological perspectives.

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