Carbon Tax vs. Cap and Trade

Carbon Tax vs. Cap-and-Trade

If I were elected leader, I would support a Carbon Tax system for Carbon Emissions instead of a Cap and Trade system.

A carbon tax gives incentive for companies to not pollute. According to Carbon tax vs. Cap-And-Trade: Which is Better?, "A carbon tax..gives firms...an incentive to reduce pollution whenever doing so would cost less than paying the tax." Thus, taxing firms would actually directly help the environment because carbon emissions would be reduced.

In addition to helping the environment, cap-and-trade takes away revenues from the government that could be used to help the nation. In Carbon tax vs. Cap-And-Trade: Which is Better?, it states, "With cap-and-trade...permits are given out for free initially (known as "grandfathering")...Grandfathering...deprives the government of valuable revenues, which it could raise in auctioning the permits initially, and which could be used to reduce other taxes." The revenues that the cap-and-trade system denies the nation from could be used to improve the nation greatly. Depriving a nation of revenue that could be used to lower taxes is counter-productive. The people will be less inclined to actually care for the environment if they're taxes are extremely high. 

Finally, while cap-and-trade does provide "certainty about the quantity of emissions", it also provides uncertainty of cost. Having uncertainty of cost is inefficient and ineffective, as companies will not have the assurance of how high or low the costs will be. 

Attached below is what a Carbon Tax vs. Carbon Cap-and-Trade graph would look like:

Gas, Still Not as Cheap as It Used to Be

How does this article reflect the ideas of Demand and/or Supply that we learned in class?
Energy costs are a major expense for most families, and many of those family want tax cuts. The government is taking many steps to push oil costs even lower, like drilling for more oil.
More oil means lower prices, which can lessen the energy costs for the majority of America. Although drilling for oil has negative effects, like carbon emissions, the need for oil is so large that the government is willing to let those carbon emissions be released.

How have you seen the ideas of Demand and/or Supply play out in your own experience in the marketplace?
See Last Blog Post (Using Economics in Homecoming Ticket Sales).

Homecoming Ticket Sales

Using Economics in Homecoming Ticket Sales

There is a method to selling Homecoming tickets, and it heavily involves Economics.
The Homecoming ticket sales use a staggered price system, meaning those who buy early save more, and those who buy late pay more. In this case, Conant's Homecoming ticket costs $15 the first week, $20 the second week, and $30 at the door. One who buys their ticket the first week saves $5-15.
If one buys tickets early, they save money, but they also compromise on accounting sudden changes of plans that might occur. If suddenly their plans change and they cannot go to Homecoming, they cannot return their ticket. This shows opportunity cost.
Also, Conant can afford to double prices on their tickets because Homecoming is an event people want to go to. If Conant's Homecoming was consistently bad, no one would pay double the price for a ticket. But because Conant's Homecoming is consistently good, they can sell fewer tickets for high prices and still make money. This shows how surplus and shortages come into play. Conant has limited space, so they have to limit the number of ticket sales, which can cause a shortage. But by making the price higher, those selling Homecoming tickets naturally weed out those who didn't really want to go to Homecoming in the first place, and sell tickets to those who actually really want to go.

Marginalism in School

Marginalism in School

In school, students make tons of choices everyday. A lot of these choices happen during students' lunch hours, specifically, in the cafeteria. Here are four examples of what (many times) occurs in the cafeteria. 

Student A goes to lunch and decided to buy two unhealthy snacks from the A La Carte Line instead of one full lunch to save money. If the lunch is $3.40 and the two snacks are a dollar each, the student's saves $1.40 and is able to save the extra money for another day. However, the student sacrifices a healthy lunch for unhealthy snacks, which will lead to a sugar high, and subsequently, a sugar crash. In order to save money on lunch, the student must sacrifice their health. Student A chooses to buy cheaper snacks instead of a healthy lunch, which shows opportunity cost.

Student B goes to the regular lunch line and buys a regular lunch for $3.40 instead of buying two cheap, unhealthy snacks for a dollar each. The student loses an extra $1.40 in an effort to buy a healthier, more filling lunch. Student B spends more money and sacrifices extra money in order to have a healthier lunch. The student chooses to buy a full, healthy lunch instead of a cheap snacks, which shows opportunity cost. 

Student C takes an AP science course and only has half a lunch period, but has a pass that lets them cut through the lunch lines faster. Student C chooses to have half a lunch period and takes a tougher course, but spends less time in lunch lines and gets college credit, which shows opportunity cost. 

Student D takes a regular science course and has a full lunch period, but cannot cut through the lunch lines because they have no pass. Student D chooses to have a full lunch period and takes a easier course, has to wait in lunch lines and gets no college credit, which shows opportunity cost.

In summary, these are just four examples, and with countless other variables in the equation, it's not surprising that students have to make numerous choices everyday.