EC238 Chapter Notes - Chapter 13: Ozone Depletion Potential, Copenhagen Accord, European Union Emission Trading Scheme
Document Summary
Excise tax on ozone depleters: escalating tax on the production of ozone-depleting substances. The tax rate per pound is a base dollar amount multiplied by the chemicals odp (ozone depletion potential). This excise tax acts as a product charge on the ozone-depleting substance. This excise tax is set equal to the mec at efficient output. Reduced availability of cfcs alongside excise tax on production, caused supply to shift left which elevated the price. This also increased the demand for cfc substitutes. Buyers of such commodities such as fridges and a/c units paid higher prices over time. The us of the tradable allowance plan along with the excise tax, recycling program and safe alternatives achieved the phase-out objectives in a more cost-effective manner. This was less disruptive than an immediate ban on production because it allowed society to make the proper adjustments. Global warming: increased temperature of the earth"s surface caused by accumulating ghgs that absorbed the sun"s radiation.
