Australia’s Policies Towards Climate Change

Anushka Gupta

Country - Australia

Global Warming is the increase of Earth's surface temperature due to effect of greenhouse gases which trap heat in the earths atmosphere. Concern has grown in recent years over the issue of global climate change. Greenhouse gas emissions, which cause planetary climate changes, represent both an environmental 

negative externality and the overuse of a common resource. The atmosphere is common to all firms and individuals into which they release pollution. 

In many countries environmental protection laws limit the release of local and regional air pollutants. In these situations the government tries to reduce negative externalities, associated with local and regional pollutants, by internalising them. Carbon taxes on energy sources which emit carbon dioxide are set. It is a pollution tax, which some economists favour because they tax a 'bad' rather than a ‘good'. Carbon taxes address a negative externality.

Australia faces significant environmental and economic impacts from climate change across a number of sectors, including water security, agriculture, coastal communities, and infrastructure. These include human health problems caused by air pollution from the burning of coal and oil; damage to land from coal mining and to miners from black lung disease; environmental degradation caused by global warming, acid rain, and water pollution; and national security costs, such as protecting foreign sources of oil. 
  
Since 1910 the average temperature of Australia has risen by about 1-2°C. Although these increases sound small, they have a big impact on the world's climate.

Hence for more than a decade, the Australian Government has pursued a range of policies and related initiatives as part of its response to climate change. These operate in conjunction with policies and initiatives implemented at state and territory level.

The election of the Rudd Government in 2007 saw a major change of Australian Government policy through Australia’s ratification of the Kyoto Protocol. 

One of the earlier measures that continues today is the Mandatory Renewable Energy Target (MRET) scheme, which has developed into the national Renewable Energy Target (RET) scheme, and targets 20 per cent renewable energy by 2020 for Australia's electricity supply.

The central element of the Government's Direct Action Plan to reduce Australia's domestic emissions is the Emissions Reduction Fund. The Fund is designed to make a contribution towards the target by providing incentives for low-cost emissions reductions across the economy.

Another implementation is the The Land Sector Package. It is a key element of the Government’s comprehensive plan to move Australia to a clean energy future. The Land Sector Package recognises that farmers and land managers have an important role to play in reducing emissions along with governments, households and the wider business community, and creates new income streams for land managers.

Around $1.7 billion will be spent over the next six years through seven specific land sector measures, creating opportunities for rural and regional Australia to benefit from the carbon market. The Land Sector Carbon and Biodiversity Board has been established to provide advice on implementation of the measures.

Australia’s carbon price has also created significant effects and further will.

It will put an economic premium on releasing less pollution for every megawatt hour of electricity generated. A carbon price will narrow the cost differential between electricity from conventional coal-fired generation technologies compared with electricity from natural gas and renewable sources.

How does Australia's Carbon tax works?

https://www.youtube.com/watch?v=HCK0gNV4lnU

Australia, have declined about 3% compared to the 1990 and will reduce its greenhouse gas emissions by five per cent below 2000 levels by 2020. Australia's commitment represents a substantial reduction from business-as-usual. On a range of indicators it is comparable to commitments from other major economies, including the United States, the European Union and China.

Resources:

http://www.acci.asn.au/Files/Government-Carbon-Tax-Plan

http://www.climatechange.gov.au/reducing-carbon/carbon-farming-initiative/carbon-farming-initiative-handbook/clean-energy-future

http://www.environment.gov.au

Global warming and externalities: India

Topic: India

The issue global warming has been a pressing issue for humans for the past 5 to 10 years now.  The greenhouse effect, caused by change in wavelength of solar radiations, helps the Earth maintain an average temperature that can sustain life. However, human usage of fossil fuels has added to carbon dioxide to the atmosphere and changed the previously experienced balance. This usage of fossil fuels is mainly because the human pursuit of industrialisation and our need for large amounts of energy to sustain our current lifestyle.

            Fossil fuels, like coal and petroleum, are used in two ways: on a large scale and on a small scale. The fossil fuel used on a large scale is mainly coal. It is used in thermal power plants, to produce electricity, and in smelters to smelt metals like iron. However, production of these results in negative externalities (third party effects) like pollution. Dumping of mass amount of gaseous wastes into the atmosphere pollutes it with sometimes toxic fumes. Not only can these fumes and gases cause severe respiratory disease, but also cause irritation in the eyes and contribute to smog, which can be a safety hazard for road vehicles and airplanes. Small-scale use of fossil fuels again leads to release of poisonous gases like carbon dioxide and carbon monoxide. Although these are used on a much smaller scale than industries, the sheer number of people using these fossil fuels in their lives makes this cause a relatively large negative externality. Increasing demand in fossil fuels also results in digging up of the ground to mine these fossil fuels, resulting displacement of many people who live there. It also destroys the natural habitat. Mining of petroleum and natural gas in the sea can cause oil spills, like the BP Gulf of Mexico oil spill, or the Exxon Valdez. These also destroy the marine habitat severely, and can cause poisoning to those who eat the fish killed by the oil spill.

            The long-term effect of negative externality caused by the use of fossil fuels is that of global warming. Since carbon dioxide is a greenhouse gas, one that traps heat into the atmosphere, it increasing quantity in the atmosphere is causing an increase in average temperature across the globe. This increase in temperature is causing melting of the polar ice caps, resulting in rising sea level. Consequently, many low-lying island have already been flooded by the sea, and it is projected that if this trend continues, they will be completely submerged, leading to loss of life and property, and loss of many ecosystems.

            India has identified this problem and is working hard to implement reforms in the administration to allow for more eco-friendly ways to produce energy and allow industries to function.  The government has formed the National Action Plan on Climate Change (NAPCC), which is aimed at forming policies and programs to address the issue of climate change. Many sub-plans exist within it. National Solar Mission is aimed at development and use of solar energy for current and future generations. It has a goal of increasing production of photovoltaic to 1000 MW/year. National Mission for Enhanced Energy Efficiency is aimed at reducing energy use of large-scale users of energy using incentives and public-private partnerships. National Mission on Sustainable Habitat is aimed at creating a sustainable India capable of supporting itself without harming the habitat around it. It plans to implement urban waste management systems and waste-energy production units. National Mission on Strategic Knowledge for Climate Change is aimed at gaining more knowledge and information regarding the issue of climate change and global warming using better climate modeling and climate research funds. The Indian government has also made legislations regarding installation of equipment in industries that reduce the effect of spewed gases, like catalytic converters and scrubbers.

            With these measures in place, India should be ready to battle of climate change and global warming. However, all countries in the world must join hands and battle this issue together. International binding agreements like the Montreal Conference and Copenhagen Accord must be made so that all countries fight this pressing issue, even if they wouldn’t like to. Optional agreements are not effective since the real culprits of global warming, like the Untied States and Canada, end up not signing the agreement and continue to further aggravate the current situation.

            Other methods to control global warming like carbon taxes and carbon trading schemes must be implemented to persuade industries to switch to cleaner and greener technologies to reduce the rate of increasing temperature.

Blogging Tips

In blogs comments have some word count restriction so if your work is exceeding the word count you can make a new post. Don't forget to mention in comment box.
Put post title as I mentioned below.
Topic: country name, you can see an example that I have done in one case of Switzerland.

Global Warming and Externality: Case Switzerland

Global Warming is the increase of Earth's average surface temperature due to effect of greenhouse gases, such as carbon dioxide emissions from burning fossil fuels or from deforestation, which trap heat that would otherwise escape from Earth.

Burning of fossil fuels leads to an increase in global warming and hence leads to a negative effect on the environment.

Negative externalities are the negative effects on a third party by the actions of another party. In the case of global warming in Switzerland, the negative externality is on the citizens of Switzerland.

For example, the increase in use of fossil fuels would increase the amount of carbon dioxide gas in the air which would be inhaled by the citizens. This is the marginal social cost whereas the costs paid by the company that burns the fossil fuels is only paying their production costs that is the marginal private costs. Hence, the marginal social costs are more than the marginal private costs since the costs are more than what the company is paying for. In this case, the demand is constant and hence the marginal social benefit and the marginal private benefit is the same. From this, we can conclude that global warming is a negative externality.

What the government is doing to prevent this?

1.       Many governments have introduced cap and trade schemes

2.       In Switzerland, the FOEN handles the environment maintenance and pollution and hence they are the body that makes laws for polluting firms to pay carbon tax and to make them buy cap and trade schemes.

3.       The FOEN (Federal office for the Environment) which is the body related to the environment and maintaining it in Switzerland. In Switzerland, the FOEN has decided set laws that companies would have to buy cap and trade schemes. The principal of cap and trade schemes is to maintain the amount of carbon emissions in the atmosphere and to control the pollution by selling a limited amount of cap and trade schemes that allow a company to emit a certain amount of carbon dioxide into the air and this would help the government know how much carbon dioxide is being emitted and helps them to control it the FOEN has undertaken ETS in Switzerland. ETS (emission trading schemes)

4.       Companies that are large and intensive need to buy cap and trade schemes compulsorily whereas smaller companies may participate in this emission trading scheme voluntarily. The companies that have an installed capacity of 20MW are needed to participate in these schemes while companied that have an installed capacity of 10MW may participate voluntarily.

5.    The FEON predetermines the amount of emissions allowed per cap and they lower it every year. Emission allowance- emission allowances that are not emissioned for free are auctioned off for companies to buy and they are held several times a year.

6.       Monitoring by companies in the ETS- companies in the ETS must report their annual emissions. These emissions are recorded in a monitoring system. These reports may be verified by an independent third party by the FOEN.

7.    Emissions allowed for free(benchmark approach)(Only the quantity of emission allowances required for CO2-efficient operations are issued for free to companies participating in the emissions trading scheme (ETS). This quantity is calculated on the basis of benchmarks.

8.    In principle, the quantity of emission allowances issued for free is calculated based on product benchmarks. These benchmarks determine the maximum quantity of emission allowances that are issued per unit produced (e.g. 1,514 emission allowances per tonne of aluminium). Each benchmark corresponds to the average emissions of 10 per cent of the most efficient installations. In order to ensure the same competitive conditions [1]that exist in the EU, the Swiss ETS applies the same benchmarks as those used in the EU ETS.)

These are the steps undertaken by the Swizz government to prevent global warming from being a negative externality since they have tried to bring the marginal private costs and marginal social costs close since they increased the marginal private costs by making firms pay for the carbon emissions and this also lead to a decrease in the marginal social costs since this scheme reduces the carbon emissions since companies would not want to spend excess amounts on carbon taxes and would hence cut down on their carbon emissions.

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[1] http://www.bafu.admin.ch/emissionshandel/05545/12434/index.html?lang=en

http://www.bafu.admin.ch/emissionshandel/05545/?lang=en

Global warming and Externality

Graded Assignment
Grade 11 HL3

Research the issue of global warming. Analyse the negative externalities associated with the use of fossil fuels. Evaluate some of the proposed policy (specific country allocated to you) responses to the problem of global warming, in particular carbon taxes, cap and trade schemes, and subsidies for green technologies. Why are binding international agreements (Kyoto, Copenhagen) necessary to solve the problem of global warming.

 Word count: 500 words minimum

Due date: Sunday 11th 2015.

 [After due date maximum grade C, and effort grade 3]

1 Agarwal Abhiji : United Kingdom
2 Bhana Ria         : Norway
3 Dangi Divy         : USA
4 Dhawan Sumair : China
5 Goyal Arjun         : India
6 Gupta Anushka : Australia
7 Lulla Sumer         : Sri Lanka
8 Sippy Meahak : Japan
9 Parekh Sanya : Canada
10 Ranka Raj        : Switzerland
11 Sanghavi Nirag    : Gemmany
12 Seksharia Vir        : Russia
13 Shah Diya        : France
14 Somani Nitya        : Denmark

Macro economic policy objectives and conflict of interest

Macro economic Objectives

   

Graded Assignment.

Grade 12 HL3

Research the current economic situation in the country allocated to you. What seems to be the biggest problem facing policy makers? What mix of policies do you think would be best suited to dealing with the problems? Evaluate what might be some effects on other economic objectives of enacting policies.

[Post your essay by clicking on the comment. You can also post on this blog but mention your work through comments so that I can trace the work done by you for completing this assignment] 

Word count:  500 words minimum.          

Last date submission Sunday, January 11th,2015. 

Grade 12 HL3
1	Advani Ishaan	China
2	Bhansali Adit	Indonesia
3	Dagliya Dhwani	Switzerland
4	Gupta Madhav	Japan
5	Jhaveri Yash	Vietnam
6	Jindal Ishaan	Germany
7	Kothari Armaan	Thailand
8	Kothary Parshav	South Africa
9	Mahajan Mehak	Argentina
10	Sethi Ishaan	Canada

Macro economic policy objectives and conflict of interest

Macro economic Objectives

   

Graded Assignment.

Grade 12 HL2

Research the current economic situation in the country allocated to you. What seems to be the biggest problem facing policy makers? What mix of policies do you think would be best suited to dealing with the problems? Evaluate what might be some effects on other economic objectives of enacting policies.

[Post your essay by clicking on the comment. You can also post on this blog but mention your work through comments so that I can trace the work done by you for completing this assignment] 

Word count 500 words minimum.          

Last date submission Sunday, January 11th,2015.

Grade 12HL2
1	Agarwal Ruchir	India
2	Arshiwalla Hussain	Brazil
3	Bhatia Aryamika	Bangladesh
4	Bhogilal Hradini	Mexico
5	Desai Gaurangi	Egypt
6	Faizullabhoy Zahra	Iran
7	Ghai Shivaan	UK
8	Goenka Anandita	South Korea
9	Goenka Shrivar	Israel
10	Harthiramani Tanya	Saudi Arabia
11	Issa Faisal	Venezuela
12	Jatia Tanisha	Norway
13	Jhaveri Anaya	Australia
14	Kasbekar Arnav	Denmark
15	Oeroi Jahaan	Sri Lanka
16	Patel Reha	Netherlands
17	Shah Adiva	Belgium
18	Rohan Lodah	Portugal

 

Essay writing tips for IB DP economics

Easy to score well in the IB Exams. Just need to work smartly with little hard work.

Essay writing tips for IB SL/HL exams and school exams.

Evaluating freely floating exchange rate

For Grade 12SL Economics

The Exchange Rate

It represents the rate at which one currency buys other currency and shows the power with which it can purchase goods and services around the world. Important to note that their are two most popular exchange rate systems one is freely floating exchange rate (capitalist economies) and the second is fixed exchange rate system (command economies). Its not an hidden fact that counties around the world try to influence the exchange rate in order to stimulate the exports and to depress the imports. They usually follow various ways to rein in uncontrolled exchange rates. In modern day countries have adopted a middle path known a managed floating exchange rate system. Its important to the student of economics to learn these system of exchange rate adopted around the world to improve their knowledge of international trade. 

Below is given the links of two articles about the exchange rate.   

Here is a question to practice.

Analyse and Evaluate the importance of freely floating exchange rate in the all round development of a country.

Post your essay here by clicking on the comment.

[you can select any other country for your reference, give link to any specific article if you are using, careful I will use turnitin for honesty]

Word count 500 words,            Due date for submission Sunday, January 11th,2015.           

Ref Article 1. Exchange rates, headaches [The Economist]

Ref. Article 2: Will Venezuela's New Floating Exchange Rate Curb Inflation?

Reference 3: Exchange Rate