Potential Challenges Faced by the U.S. Chemicals Industry under a Carbon Policy

Abstract

Chemicals have become the backbone of manufacturing within industrialized economies. Being energy-intensive materials to produce, this sector is threatened by policies aimed at combating and adapting to climate change. This study examines the worst-case scenario for the U.S. chemicals industry when a medium CO 2 price policy is employed. After examining possible industry responses, the study goes on to identify and provide a preliminary evaluation of potential opportunities to mitigate these impacts. If climate regulations are applied only in the United States, and no action is taken to invest in advanced low-and no-carbon technologies to mitigate the impacts of rising energy costs, the examination shows that climate policies that put a price on carbon could have substantial impacts on the competiveness of the U.S. chemicals industry over the next two decades. In the long run, there exist technologies that are available to enable the chemicals sector to achieve sufficient efficiency gains to offset and manage the additional energy costs arising from a climate policy.

Time Series Analysis for the Dynamic Relationship between an Enterprise’s Business Growth and Carbon Emission in Taiwan

“…At present, in order to solve the problem of externalities derived from corporate greenhouse gas emission, governments have applied "carbon pricing" to the international carbon emission trading market mechanism and also formulate carbon tax regulations to reduce greenhouse gas emission and achieve optimal pollution levels. Governments planning to move towards "carbon emission trading" or a "carbon tax" model in the future may change the business model if the regulations are implemented [19,20]. Therefore, it will be a challenge for enterprises to continue to operate and profit.…”