Analysis of Carbon and Fuel Prices on Industry Competitiveness

This report examines the impact of carbon and fuel prices on industry competitiveness. It begins by defining carbon pricing and its role in addressing climate change, emphasizing the principle of making polluters accountable for greenhouse gas emissions. The report then explores how carbon and fuel prices affect industry competitiveness, including potential impacts on market share, investment, and production decisions, particularly in sectors reliant on fossil fuels. It highlights the importance of designing sound policies and implementing market-based incentives to reduce emissions and promote low-carbon alternatives. The report also suggests considering complementary measures to support businesses and sectors negatively impacted by carbon pricing. The report concludes with a discussion of carbon leakage and the need for effective strategies to mitigate its effects.

Name:
student ID:
IMPACT OF CARBON PRICES AND FUEL PRICES ON INDUSTRY
COMPETITIVENESS

Carbon pricing: According to Ranson and Stavins (2016),carbon pricing is an instrument capturing
the external greenhouse gas emission costs like healthcare costs from droughts
and heat waves and property loss from rise in sea level and flood.
 Carbon pricing assists in transferring the damage from greenhouse gas emissions
to those accountable for the same along with having the ability to avoid it
Impact of carbon and fuel pricing on industry
competitiveness:
 Its makes the polluter to pay extra principle supports carbon and fuel pricing and
its enforcement is meant in order to account the damage cost owing to
greenhouse gas emissions and the playing field is tilted from emission-intensive
activities to low-carbon solutions.
 It fails an organization in maintaining its market share
 it affects investment and production decisions
 A few sectors are controlled by fossil fuel production, consumption and processing
and these sectors would contract under carbon pricing (Branger and Quirion 2013).

Techniques of managing adverse effects of carbon and fuel
prices on industry competitiveness
 Designing of sound policies offer market-based and targeted
incentives for organisations and sectors in order to minimise
emissions and invest in low-carbon, energy effective alternatives
and processes, while simultaneously eliminating subsidies for
greater carbon business activities could move a long path
towards modification of the competitive landscape
 The policymakers could take into consideration complementary
measures for easing the transition for negatively affected
organisations, regions and sectors. These constitute of dedication
of carbon revenues to regional economic growth along with
supporting for easing the transition of sectors and businesses
competing globally

REFERENCES:
 Branger, F., and Quirion, P. 2013. Carbon leakage and
competitiveness of cement and steel industries under the EU
ETS: much ado about nothing [online] Available at:
https://www.researchgate.net/publication/259562193_Carbon_lea
kage_and_competitiveness_of_cement_and_steel_industries_unde
r_the_EU_ETS_much_ado_about_nothing [Accessed 4 Apr. 2019]
 Ranson, M. and Stavins, R.N., 2016. Linkage of greenhouse gas
emissions trading systems: learning from experience. Climate
Policy, 16(3), pp.284-300.