Essays on Impact of Carbon Tax on Business Operations in Australia and the UK Case Study

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The paper "Impact of Carbon Tax on Business Operations in Australia and the UK" is an outstanding example of a business case study.   Safirova et al, 2001 posits that governments form frameworks and regulations well known as policies, in which businesses can compete against and align with each other. At times, the government changes these policies in view of their performance and how they have effectively or ineffectively delivered on the intended purpose. These changes in policies may force the change of manners in which businesses are operated in a particular sector.

In other words, businesses and their operations are keenly affected by set policies. For instance, a policy may impose more duties or taxes which do not align well with profit margins in a particular segment of the business, and then operating business in that sector becomes hard. In this case, businessmen can either lose interest in the sector or even close down their businesses (Safirova et al 2004). On the other hand, if the set policy exempts or decreases duties and taxes imposed on a sector coupled with reasonable rates for loans, then business operation it becomes easy to operate, hence many businessmen invest in the sector (Safirova et al 2004).

This paper looks at a carbon tax policy as the current policy that affects the operations of businesses both in Australia and the United Kingdom. Carbon Tax According to Zhang and Baranzini, 2004 a major policy issue that is currently affecting the operation of businesses in many countries is the Carbon tax policy. A carbon tax is an obligatory tax levied for carbon emission. This type of carbon pricing is imposed on businesses that emit carbon in the atmosphere.

Generally, carbon is contained in any hydrocarbon fuel such as coal, natural gas and petroleum. On burning these fuels, the carbon in the form of carbon dioxide is released in the air. The gas carbon dioxide has been cited as a threat to the curbing of climate change. Being a greenhouse gas that can trap heat, carbon dioxide is largely associated with global warming. In this regard, various governments especially those concentrated with industries have framed rules and regulations on emission of carbon, hence imposing a tax on these emissions based on carbon content (Yusuf & Resosudarmo 2007 ). Carbon taxes are aimed at reducing the emission of carbon dioxide in the air.

From an economic viewpoint, carbon taxes are referred to as Pigovian tax. This means the problem is addressed without greenhouse gases emitters paying the full cost of the effect. Moreover, carbon taxes have been argued to be regressive. In other words, they directly or indirectly have an effect on low-income business enigmatically. However, the government posits that the regressive impact of a carbon tax is can be compensated by using the attained revenues to support low-income groups (Clean Energy Future 2011). Carbon Tax in Australia In Australia, the legislation in regard to carbon tax implementation passed through successfully in parliament on 8 of November 2011.

This legislation confirmed the start date of the tax implementation in the country. On the first of July in 2012, the federal governments of Australia launched a carbon price of 23 dollars as a price for every tonne of carbon dioxide emitted in the air. This fixed price is effective for 2012 and 2013 year but meant to change by 2015 when permits are limited and adhere to a pollution cap.

This implementation largely targets the big industrial emitters of selected fossil fuels which emerged as 500 at the time of implementation of the policy. The government uses the carbon tax revenue in reducing income tax by raising the part of the tax-free threshold. Tax revenues are also used to raise welfare and pension payments to cover prices increases, as well as for compensating affected industries (Cox & Stockwell 2011).


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