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Government and Energy, Essay Example

Pages: 2

Words: 509

Essay

A1. I support subsidies for companies who are producing ethanol. Oil companies do not need subsidies because first of all, they are already highly profitable and do not have any justification to be supported economically by the government. In contrast, the economics for ethanol producers is still unattractive, thus, the government needs to provide them with subsidies to encourage them to continue to develop the technology. Ethanol producers are also at a disadvantage when it comes to economies of scale because the demand is still low and without government subsidies, ethanol producer may abandon their efforts. The government should also provide subsidy due to the stakes involved as well as the potential benefits. The success means the U.S. may become self-sufficient in energy and will have lower need for importing oil which should also enhance its political leverage.

A2. I would support increased taxes on gasoline because first of all, burning fossil fuels contribute towards environmental pollution and, thus, generate negative externalities. Taxes will enable the society to force gasoline producers to compensate for some of the negative externalities that result from their operations. In addition, tax revenues from gasoline could be invested in clean energy which will not only increase the country’s energy independence but will also be better for the environment. Taxes will also be beneficial because by increasing the cost of operating vehicles, they will encourage more responsible commuting behavior among citizens such as ride-sharing or use of public transport.

A3. The governments should impose a carbon tax on all fossil fuels because individuals should take responsibility for the costs their actions imposed on the environment. Absence of taxes imposes costs on those who have nothing to do with environmental pollution. The taxes are fair because they ensure that the costs are borne by those who pollute the environment and the burden varies directly with the consumption level. Thus, it will encourage more responsible consumption of fossil fuels.

A4. Automobile manufacturers should be forced to make more fuel-efficient cars because like any other business, automobile manufacturers also have several stakeholders and not just shareholders. Thus, while it is important to earn profit, profit should not be the only motive. Other stakeholders of automobile manufacturers include customers, communities in which they operate, and the government. More fuel-efficient cars will benefit several other stakeholders including communities through lower environmental pollution, customers through lower ownership costs, and governments through lower oil consumption.

A5. The governments should provide tax breaks to individuals who change the way they use energy. This will advance the overall interests of the society because it will encourage more responsible use of energy sources and lower pollution. When possible, the governments should encourage positive behavior through incentives because in free societies, the governments don’t use force but instead provide incentives to bring about voluntary change. The government will not only encourage socially responsible behavior but will also benefit in economic terms. More responsible use of energy sources mean there will be lower costs of importing energy resources and the government will also incur lower costs in containing environmental pollution.

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