Neoliberalism is a phrase that is used in reference to a set of economic policies that have been widely popularized in the past 25 years. Through these policies, a situation is created whereby the rich grow richer while the poor continue to languish in abject poverty. This mainly occurs because through neoliberalism, the control of economic factors is moved from the public to the private sector. Thus, only handful individuals who already have some sort of power are able to make their way up in terms of economic gains.
Neoliberalism offers a suggestion that governments should cut down deficit spending, exercise limitation on subsidies, limit protectionism, privatize businesses that are run by the state, back deregulation and give and give way for private property developments. When looking at the concept of liberalism, it is also of great importance to bear in mind that it can as well be used in reference to religious and political ideas. However, the phrase neo suggests a new form of liberalism that gives capitalists the opportunity to make as much profits as they can even if it is at the expense of the majority of the population.
There are main points that one should always base their arguments when defining neoliberalism. One of them is the rule of the market. Neoliberalism seeks to excuse private enterprises from any bonds that may have been imposed on them by the state irrespective of the social impacts that it is deemed to cause. Besides, it also aims at reducing wages through de-unionization of workers and elimination of their rights. Besides, it also looks towards removing price controls, and ensuring free movement of goods, services and capital.
Another basic aspect of neoliberalism is that it significantly reduces the public spending on vital services like education and healthcare. In fact, it ensures that the government’s role in providing almost all kinds of essential services like road maintenance, water supply is withdrawn. With this, the safety nets for the poor are completely removed so that they are open to oppression. Neoliberalism is aimed at reducing government regulation of anything that has the potential of diminishing profits so that capitalists can make as much as they wish.
Neoliberalism also proposes that the state should sell a greater part of its assets like industries, banks, toll highways, hospitals, schools among others to private investors. In order to avoid public suspicion, all these are conducted under the banner of enhancing greater efficiency. However, the result is that it concentrates more wealth in just a few hands such that the public is pushed to paying more in order to meet its needs.
When all the issues highlighted above are brought together and successfully executed, the concept of community or public good is completely eliminated. Neoliberalism imposes a concept of individual responsibility whereby each and every person is entitled to use their own means to survive. Apart from just being used by governments, neoliberalism has also been imposed by many powerful institutions around the globe like the IMF, Inter American Development Bank, World Bank among others.
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Emissions trading which is also known as cap and trade is an approach that is market based used for purposes of controlling pollution through provision of economic incentives for reduction in emission of pollutants. A central power (often government body) is mandated with the task of setting the limit or cap on the pollutant amount that should be emitted.
This limit is sold or in some cases allocated to firms usually in form of emission permits that represent the appropriate discharge or emit. Firms are supposed to have a couple of permits that are equivalent to the level of emissions they make. The permits number should be more than the set limit or cap that limits average emissions to the stated level. Firms interested in increasing their emissions volume must be willing to buy the permits from those in need of few permits.
Permit transfer is known as trade and in effect, buyers pay a polluting charge while sellers are rewarded for their reduced emission. Consequently, those in a position to reduce emissions do so cheaply and they are able to achieve reduction of pollution at the lowest possible cost to the society.
Emissions’ trading is preferable because:
- It is an economically efficient strategy for attaining the desired emission target or reduction cap
- It is designed specifically to deliver an environmental objective.
- It delivers a price signal that is clear and against which abatement investments are measured.
There are various air pollutant programs that are active. For instance in the case of greenhouse gases, the European Union Emission Trading Scheme is the largest and its purpose is that of avoiding climate change that is dangerous. In the US, a national market is available for the purpose of reducing acid rain and numerous regional nitrogen oxides markets. Other pollutant markets however are often small and far localized.
The major goal of any emissions trading is minimization of costs associated with meeting set emissions cap or target. Usually, the cap is a limit that is enforceable and it is lowered over certain duration with the aim of reaching reduction target at a national level. In some of the systems, the proportion of traded permits should be periodically retired leading to net emissions reduction over time.
In most of the emissions trading systems, organizations that don’t pollute and with no obligations can also take part in trading. Therefore, environmental groups have the right to buy and retire emission permits driving the price of those permits remaining high in accordance to demand law. Corporations might retire allowances prematurely as well by donating such to non-profit entities and hence be eligible for tax reductions.
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