The Impact of the Carbon Tax Plan on Jobs in Wollongong - Research Proposal Example

The impact of the carbon tax plan on jobs in Wollongong Introduction From the newspaper article it is reported that many people would have lost their jobs with implementation of the carbon tax plan. Some studies also indicated that the region’s economy would deteriorate as a result of this carbon tax plan. This paper proposes a survey to establish whether many people are loosing their jobs as a result of implementation of the carbon tax plan. Purpose of study This study aims at establishing whether the prediction that many people would have lost their jobs with implementation of the carbon tax plan is true in Wollongong now that the plan is in place. A survey would be carried out to determine the rate at which people are losing their jobs as a result of implementation of the carbon tax plan in Wollongong region. This study will help in provision of recommendation that can be used to ensure that many people do not continue losing their jobs. This would also help in proposing some amendments on the carbon tax plan to ensure that the economy of the region does not collapse. Literature review Carbon tax is the tax levied on energy sources which emit carbon dioxide. Carbon tax aims at addressing negative externality (Winkler and Marquard, 2009). These externalities come about when production activity imposes benefits or costs on others (Nordhaus, 2010). Carbon tax is usually imposed in order to reduce carbon dioxide emissions and thus reducing the rate of global warming. It is widely believed that carbon dioxide production results in both environmental and social problems including global warming (DuPont 2009). The effect of these problems is felt by both those who consume the product and those who do not (Nordhaus, 2010). From the article steel industry and coal mining industry are carbon intensive industries in Wollongong. These industries have a lower cost of production as compared to that which is experienced by societies living in the region (Lippke and Perez-Garcia, 2008). The exclusion of these negative externalities is often not included in the price carbon dioxide emission and as a result there has been overconsumption of coal and steel without consideration of social efficiencies (Scrimgeour, Oxley and Fatai, 2005). A carbon tax is usually intended to internalize these externalities (Winkler and Marquard, 2009). This implies that the pricing of a product whose exploitation and production that emits carbon dioxide includes both external and private cost (Lippke and Perez-Garcia, 2008). Such pricing can consequently result in a fall in the demand hence establishing a new equilibrium which is socially efficient (Yang, 2001). This is because the total cost to the society equals to the total benefit to the society. Some of the benefits of carbon tax are that it encourages the firms and consumers involved to seek alternatives which are more efficient (Metcalf, 2009). For instance, firms are encouraged to utilize green sources of energy in their production processes (Winkler and Marquard, 2009). Thus in the case of steel and coal industries in Wollongong the tax plan could reduce exploitation of coal while the steel industry will seek alternative green energy to run their production processes (Yang, 2001). Another benefit of carbon tax is that it generates revenue for the government. Thus in the case of Wollongong, the NSW government should be raising more revenue from the tax (Lippke and Perez-Garcia, 2008). This can be used to subsidize production of green electricity (Nordhaus, 2010). The carbon tax is also making people in the region to pay social cost. In spite the benefits of carbon tax, there are several problems associated with such taxes. First, such taxes may lead to mass shifting of firms to regions which have no or lower carbon taxes. This implies that some steel companies and coal mining firms in Wollongong may decide to shift their investments to other countries with lower taxes (Nordhaus, 2010). Second, carbon tax needs that some costs be incurred to administer the tax. There is also a possibility that some firms are evading to pay such taxes. Another problem of carbon tax, is that it does not provide a surety that carbon dioxide emission will decline within their enactment. In addition, the right level of income cannot be determined in advance (Winkler and Marquard, 2009). Due to these problems the level of consumption of the products may decrease. Thus many people may lose their jobs. Based on this, the current study aims to find out the impact of carbon tax plan in Wollongong region on job losses. Method to obtain empirical evidence The study will employ a quantitative method to obtain empirical evidence (Metcalf, 2009). This is a method used to collect data impartially by using structured procedures and involves using large amounts of samples (Lippke and Perez-Garcia, 2008). This method has a disadvantage of beginning with a theoretical framework and has little diversion from this framework as a result. Quantitative research does not allow any new concepts to be discovered during the research (Winkler and Marquard, 2009). The quantitative method to be employed in this study is a self-completion survey method involving the use of structured questionnaires to collect data. A structured questionnaire contains a predetermined set of questions designed to capture data from respondents (Nordhaus, 2010). Self –administered questionnaires will be administered manually to a cross-sectional of residents of Wollongong who work or have been working in different steel or companies within the region. This will allow easy administration, and data collection and analysis (Metcalf, 2009). However, the draw back is that it is expensive to deliver the questionnaires manually and the method cannot be used to probe complex issues. Since most questions on questionnaire are simple and straightforward, they do not allow for searching of new issues (Lippke and Perez-Garcia, 2008). Questionnaire containing both closed and open questions will be developed from the literature review (Winkler and Marquard, 2009). The questionnaires will seek to find out the rate of job losses as a result of enactment of carbon tax plan in Wollongong region (Yang, 2001). It will also seek to establish whether some companies are intending to reduce or shift their activities to other countries as a result of the newly enacted carbon tax plan. Research design This is the structure of research. It holds all the elements of a research project together. It enables researchers to answer research questions using the evidence obtained unambiguously (Lippke and Perez-Garcia, 2008). In order to obtain evidence that is relevant one need to specify the type of evidence required for answering the research questions, to evaluate a program, to test a theory or to describe a phenomenon accurately (Winkler and Marquard, 2009). Thus when designing research one ought to know the type of evidence required for answering the question at hand (Metcalf, 2009). This research will use a survey design. Survey involves collection of large amounts of data from the population which is sizeable by use of questionnaires administered to the sample population (Nordhaus, 2010). Surveys provide information those suggest possible reasons for particular relationships between variables and to produce models of these relationships (Lippke and Perez-Garcia, 2008). Survey strategy generates findings which are representative of the whole population at a lower cost as compared to collecting the data for the whole population. However, the data collected is unlikely to be as wide ranging as those collected using other research strategies (Zhang, and Baranzini, 2004). This is because there is a limitation in the number of questions a questionnaire can contain, and richness of the data to be collected is dependent on the goodwill of the respondents (Metcalf, 2009). In spite the shortcoming, this research will employ a survey design. The survey will allow us to collect much data using semi structured survey questionnaires (Bosquet, 2000). Probability sampling will be used to administer questionnaires to 450 residents of Wollongong region. The study population will be divided in such way that it covers both residents staying in rural and urban areas within Wollongong region. The sample selection will be based on people who have been or are working in steel or coal companies for the last twelve months within Wollongong region. Significance of the study Carbon tax plan ought to result in an equilibrium level where negative externalities are balanced with societal benefits (Lippke and Perez-Garcia, 2008). This survey will help in establishing the impact of carbon tax on jobs in Wollongong region. If the findings indicate that many people are losing their jobs then the study could recommend adjustment to ensure that there is a balance between the economic outcome of the program and resulting job losses (Winkler and Marquard, 2009). The study is significant because the impact of the carbon source tax had been predicted to lead to massive job losses and thus this survey will help in establishing whether these predictions were true or not (Shammin and Bullard, 2009). This can be useful data to the government because it can help it introduce new ways of creating jobs for the population that falls out of job as a consequence of carbon tax plan (Nordhaus, 2010). Reflection This study proposal writing has been instrumental in expanding my knowledge in proposal writing. First the task has enabled me to use other people’s work to come with study topic. In this case I used a newspaper article to devise research topic. The task has enabled me in devising the purpose of the study by linking it to the study topic and the methodology to be employed in execution of the proposed study. I have been able to learn how to search and analyze secondary data available in order to allow me compile a literature review for my study. It has also allowed me to use literature review to assess and evaluate other related work done by scholars in order to identify gaps in research. Furthermore, this task has enabled me to apply the knowledge and skills learned in class to develop a methodology and study design. In addition, it has allowed me to develop skills on choice of appropriate method of data collection and study population. Moreover, the exercise has allowed me to practically learn how to justify the need for carrying out a study on a specified topic. The exercise has also allowed me to practically relate the study topic, the study purpose, and the methodology to be employed in data collection and sampling of the population to be involved in the study. The exercise has also been instrumental in helping me to practically develop skills of justifying the methods of data collection and sampling techniques to be employed in a carrying a research. Reference Bosquet, B. 2000. Environmental tax reform: does it work? A survey of the empirical evidence. Ecological Economics, vol. 34, no. 1, pp. 19-32 DuPont, A. 2009. An American Solution for Reducing Carbon Emissions - Averting Global Warming - Creating Green Energy and Sustainable Employment. London: Andre DuPont Publishers Lippke, B., and Perez-Garcia, J. 2008. Will either cap and trade or a carbon emissions tax be effective in monetizing carbon as an ecosystem service. Forest Ecology and Management, vol. 256, no. 12, pp. 2160-2165 Metcalf, G. 2009. Designing a Carbon Tax to Reduce U.S. Greenhouse Gas Emissions. Rev. Environ. Econ. Policy, vol. 3, no. 1, pp. 63-83 Nordhaus, W. 2010. Carbon Taxes to Move toward Fiscal Sustainability. The Economists’ Voice, vol. 7, no. 3, Article 3 Scrimgeour, F., Oxley, L., and Fatai, K. 2005. Reducing carbon emissions? The relative effectiveness of different types of environmental tax: the case of New Zealand. Environmental Modelling & Software, vol. 20, no. 11, pp. 1439-1448 Shammin, M., and Bullard, C. 2009. Impact of cap-and-trade policies for reducing greenhouse gas emissions on U.S. households. Ecological Economics, vol. 68, no. 8-9, pp. 2432-2438 Winkler, H., and Marquard, A. 2009. Analysis of the Economic Implications of a Carbon Tax. Energy Research Centre. Available at http://www.erc.uct.ac.za/Research/publications/09Winkler-Marquard-carbon_tax.pdf Yang, H. 2001. Carbon emissions control and trade liberalization: coordinated approaches to Taiwan's trade and tax policy. Energy Policy, vol. 29, no. 9, pp. 725-734 Zhang, Z., and Baranzini, A. 2004. What do we know about carbon taxes? An inquiry into their impacts on competitiveness and distribution of income. Energy Policy, vol. 32, no. 4, pp. 507-518 Read More