Global Warming and Externalities: USA

Divy Dangi
Country: USA

Economic Assignment

Global warming is the effect of greenhouse gases like carbon dioxide and methane on Earth's temperature when they are released in the atmosphere and trap the sun's heat. Global warming results in climate change. Everything, including rain, winds and temperature, that has been affected is linked to global warming.

Earth's increasing temperature results in rising sea levels due to the melting of glaciers, sea ice and polar ice sheets. This increases the amount of water in the world's oceans and seas. Scientists predict that by 2100 the increased level of water will submerge many of Indonesia's tropical islands and flood low-lying areas such as Miami, New York City's Lower Manhattan and Bangladesh. Global warming results in extreme heat waves. Due to global warming Hurricanes and other storms are likely to become stronger. Also it might affect the food chain as species that depend on each another may become out of sync. For example, plants could blossom before their pollinating insects become active. Some species might also become endangered due to the climate change. Droughts and Floods will become more frequent and Ecosystems will change as a whole. Global warming is chiefly resulted from industrialization and the overuse of common access resources.

One of the primary causes of global warming is the burning of fossil fuels. The largest human source of carbon dioxide emissions is from the combustion of fossil fuels. This produces 87% of human carbon dioxide emissions. Burning these fuels releases energy, which is most commonly turned into heat, electricity or power for transportation. It is also used in thermal power plants, to produce electricity, and in smelters to smelt metals. The 3 types of fossil fuels that are most commonly used are coal, natural gas and oil. Coal is responsible for 43% of carbon dioxide emissions from fuel combustion, 36% is produced by oil and 20% from natural gas. In the United States 68% of the electric energy produced is produced using fossil fuel combustion.

A negative externality is a spillover of an economic transaction that negatively impacts a party that is not directly involved in the decision that caused it. This occurs when marginal social cost is greater than marginal social benefits. Fossil fuel results in numerous negative externalities such as air pollution caused by the combustion of these fuels and the accompanying health care costs for premature deaths or asthma attacks that result from the increased air pollution. In the US, Mercury and toxic pollution from power plants threaten children, senior citizens, and the result in brain impairment or respiratory illnesses. Reducing these pollutants will return $3 to $9 in health benefits for every $1 in cleanup costs. Coal-fired power plants produce one-third of all the climate pollution in the United States. Also the global warming resulted from the burning of this fossil fuels cause many natural disasters. In 2011 to 2012 there were 25 floods, droughts, storms, heat waves, and wildfires that each caused at least $1 billion in damages. Together, these severe events caused 1,100 fatalities and up to $188 billion in total damages. The use of fossil fuels also leads to release of poisonous gases like carbon monoxide. This results in many health hazards like carbon monoxide poisoning and causes numerous deaths each year. Also the release of harmful gases due to the combustion of fossil fuels results in acid rain that destroys crops, infrastructure and diseases. Since the demand for fossil fuels is increases, more and more coal is mined and petroleum is dug up. This results in the relocation of many people who live next to the fuel source. It also destroys the natural habitat. Transport of petroleum in the sea can cause oil spills, like the 2010 Mumbai oil spill. This harms the marine habitat severely and inflicts diseases on people who eat the diseased marine animals. All these negative externalities are a result of global warming due to the use of fossil fuels and the impose costs to the society that the producers of the emission do not pay.

Over the past 22 years the average temperatures in the United States have increased at an alarming rate.

However, In the US, the Obama administration is taking important steps to cut carbon pollution and other greenhouse gases in America. USA put initiatives that encourage energy efficiency, promote clean energy, and put in place the first-ever carbon pollution standards for power plants.

To reduce carbon pollution from power plants, the Environmental Protection Agency (EPA) has developed carbon pollution standards for power plants, which limited the CO₂ production. The United States has developed a wide range of initiatives that reduce greenhouse gas emissions through clean energy policies. Since President Obama took office, the U.S. has increased solar electricity generation by more than ten-fold, and tripled electricity production from wind power. To reduce the effects of global warming further the US administration has proposed an average vehicle performance equivalent of 54.5 miles per gallon for all vehicles by 2025. This will significantly reduce the carbon emission by vehicles.

The government of USA is also supporting the forests and preventing deforestation so that the carbon balance in the environment can be maintained. In the United States there is no nationwide carbon tax levied however a few states and localities have introduced the carbon tax. The USA also has a cap and trade scheme for green house gases. The 2010 United States created greenhouse gas (GHG) emissions credits.

https://www.youtube.com/watch?v=zmz6srlnur8#t=32: link to President Obama’s speech on the need for reducing carbon emission, the ways to reduce it and why the all the countries should reduce it collectively.

Even though the USA is trying to reduce its carbon emission and battle the problem of global warming we need all countries in the world to work together and fight against it. International binding agreements like the Montreal Conference and Kyoto protocol must be made so that all countries can fight the problem together and countries that pollute cannot continue to cause negative externalities on the entire world as a whole. It is a problem faced by all the countries and the exclusion of even one of the countries from the agreement can result in aggravating the problem of global warming.