The Impact of Carbon Emission Restriction Policy on Small and Medium Enterprises

Abstract

In recent years, concerned by the environmental crisis caused by the overproduction of carbon emissions, governments around the world have set various means of solutions to reduce the pollution. Carbon tax, especially, give the firms opportunity of redemption to their external cost made. Carbon emission policies limit the amount of carbon dioxide emitted by companies through tradable permits and carbon tax. Therefore, it plays an obvious role in controlling the environmental pollution caused by excess carbon dioxide. In today's economy, large corporations often have the ability to survive restrictions (eg. buying a lot of tradable permits) due to economies of scale and capital. Conversely, small or medium-sized companies tend to be less optimistic. They are limited in production and R&D by carbon emission policies, and they are also unable to purchase sufficient tradable permits to support continued production because of their lack of funds. This also caused a series of problems. This paper reviews the impact of carbon emission policies on small and medium-sized enterprises, by analyzing the status quo and its quantifiable data. We will discuss carbon emission policies and both their positive and negative effects. Finally, carbon tax’s challenges and conclusion based on our research that small and medium sized firms were not impacted too much, which is an inverse result compared with our prediction, will be explained specifically.