Question

Discuss policy towards climate change. What is problem/why would the private market not work. What might Quantity regulation look like. How about Price regulation. Describe the pros and cons of these options. How might you choose between them and what type of policy/regulation would you like to see with regard to climate change. Explain.

Answer 1

1-Several policy instruments can help put a price on GHG ( Green House Gases) emissions: Carbon or energy taxes,the removal of environmentally harmful subsidies, tradable permit schemes and the project- based flexibility mechanisms of the Kyoto Protocol to the United Nations Framework Convention on Climate Change ( UNFCCC) .

2-A market failure occurs whenever the individuals in a group end up worse off than if they had not acted in perfectly rational self- interest. Such a group either incurs too many costs or receives too few benefits. Nor does a market failure imply that private market actors cannot solve the problem.

3-Choosing appropriate policy instruments is an important part of successful regulation. Once objectives are agreed and suitable targete adopted, policy- makers can employ command and control regulation and / or economic instruments, and choose between fixing a price or a quantity.

4-Pros-

1-The pro side argues rising levels of atmospheric greenhouse gases are a direct result of human activities such as burning fossil fuels, and that these increases are causing significant and increasingly severe climate changes including global warming, loss of sea ice, sea level rise , stronger storms, and more droughts.

2-They contend that immediate international action to reduce greenhouse gas emissions is necessary to prevent dire climate changes.

5-Cons-

1-The con side argues human- generated greenhouse gas emissions are too small to substantially change the earth's climate and that the planet is capable of absorbing those increases.

2-They contend thst warming over the 20 century resulted primarily from natural processes such as fluctuations in the sun's heat and ocean currents.

6-The policies are in place for climate change -

1-The UN Framework Convention on Climate Change (UNFCCC) was adopted in May 1992 and entered into force in 1994. The convention included the commitment to stabilise greenhouse gas emissions at 1990 levels by 2000. The first Convention of the Parties to the UNFCCC ( COP 1) was held in 1995.

2-Policy Regulation should be mandated legal minimum or maximum prices set for specified goods. They are usually implemented as a means of direct economic intervention to manage the affordability of certain goods.

7-Price regulation refers to the policy of setting prices by a government agency, legal statute or regulatory authority. Under this policy, minimum and/or maximum prices may be set.

8-Concerns about climate change have been rising over the past 10 years, and this year the top five long- term risks in the World Economic Forum's Global Risks Report were all in the environmental sphere. With all key indicators pointing to a bad situation getting worse, both the public and private sectors need to accelerate their climate risk mitigation and adaptation efforts.

9-The long term impacts of climate change, such as temperature and sea level rises, and recent spikes in extreme weather events, such as wildfires and tropical storms, are compromising critical infrastructure, crop production, and the livability of many heavily populated areas.

10-While business leaders should aim to create greater resilience for their companies to climate risk, the same understanding of climate dynamics can help them persue these and other opportunities for growth.

11-Key barriers include a lack of capacity within the organisation, including inadequate funds for adaptation, and an organisational culture that limits or prevents decision- making on adaptation. These organizational aspects can cause ,or reflect, a lack of leadership on adaptation.

12-Climate change would increase income inequalities between and within countries.a small increase in global mean temperature ( up to 2 degree Celsius, measured against 1990 levels. ) woule result in net negative market sector in many developing countries and net positive market sector impacts in many developed countries.