Global Warming And Externalities: Japan

ECONOMICS ESSAY

Meahak Sippy

Country: Japan

        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. This is a type of greenhouse effect.

           Global warming may threaten these needs with increased temperatures, sea level rise, changes in precipitation, and more frequent or intense extreme events. The risks of climate-sensitive diseases and health impacts can be high in poor countries that have little capacity to prevent and treat illness. 

                 Fossil fuels are the largest greenhouse gas emitters in the world, contributing 3/4 of all carbon, methane and other greenhouse gas emissions. Burning coal, petroleum and other fossil fuels at extremely high temperatures (combustion) is the primary means by which electricity is produced, but also leads to heavy concentrations of pollutants in our air and water. Human activity since the Industrial Revolution and overproduction and consumption of common access resources has increased the amount of greenhouse gases in the atmosphere. Temperatures have been rising over the same period. In fact, the 5th IPCC Report has stated that scientists are 95% certain that humans are the "dominant cause" of global warming since the 1950s.

            Japan ranked as the second largest net importer of fossil fuels in the world in 2012, trailing only China. This follows the Fukushima nuclear disaster in 2011, after which Japan suspended operations at all of its nuclear power plants. The loss of nuclear capacity resulted in a shift in Japan's energy mix toward oil and natural gas. Japan is now the third largest oil consumer and importer in the world behind the United States and China. Furthermore, it ranks as the world's largest importer of liquefied natural gas (LNG) and second largest importer of coal behind China. Japan has limited domestic energy resources, and the country meets less than 15% of its own total primary energy use from domestic sources.

              

              A negative externality is a spillover of an economic transaction that negatively impacts a party that is not directly involved in the transaction. The first party bears no costs for their impact on society while the second party receives no benefits from being impacted. This occurs when marginal social cost is greater than marginal private cost (MSC > MPC).

            The Kyoto Protocol is an international treaty that commits State Parties to reduce greenhouse gases emissions, based on the premise that (a) global warming exists and (b) man-made CO2emissions have caused it. The Kyoto Protocol was adopted in Kyoto, Japan, on 11 December 1997 and entered into force on 16 February 2005.

A number of emissions trading schemes (ETS) have been, or are planned to be, implemented. Japan: emissions trading in Tokyo started in 2010. This scheme is run by the Tokyo Metropolitan Government.

            A Green Investment Scheme (GIS) refers to a plan for achieving environmental benefits from trading surplus allowances (AAUs) under the Kyoto Protocol.

Between 2001, which was the first year Clean Development Mechanism (CDM) projects could be registered, and 2012, the end of the first Kyoto commitment period, the CDM is expected to produce some 1.5 billion tons of carbon dioxide equivalent (CO2e) in emission reductions. Most of these reductions are through renewable energy commercialisation, energy efficiency, and fuel switching. The Protocol also reaffirms the principle that developed countries have to pay billions of dollars, and supply technology to other countries for climate-related studies and projects.

Japan commits to climate change action. During the World Economic Forum on Saturday, Japanese Prime Minister Yasuo Fukuda said that Japan would prioritize climate change, by reducing her own carbon emissions while helping other countries reduce theirs as well. To start, Japan pledged US$10 billion in donations or loans to help developing countries that want to use clean energy. An additional US$30 billion would also be used to research better climate change technologies. Mr. Fukuda said, “The world as a whole must strive to improve energy efficiency until revolutionary technology which will dramatically reduce greenhouse gas becomes available.” We salute Japan for your bold world leadership and assistance to other countries. 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.

Biblography:
http://www.suprememastertv.com/save-our-planet/?wr_id=38&page=32
http://www.world-nuclear.org/info/Energy-and-Environment/Policy-Responses-to-Climate-Change/

http://oilprice.com/Energy/Gas-Prices/Why-Fuel-Subsidies-are-Bad-for-Everyone.html

Global Warming Negative Externality: Denmark

Nitya Somani

COUNTRY - DENMARK

Negative externalities occur when the production or consumption of a good causes a harmful effect to a third party. If goods or services have negative externalities, then a situation of market failure will arise. This is because individuals fail to take into account the costs incurred by other people. Negative externalities are also referred to as spillover or external costs. Negative externalities of production occur when there is overproduction of a particular good or service created by producers. Negative externalities of consumption occur when there is overconsumption of a particular good or service created by consumers. In both cases, the marginal social cost is greater than the marginal private cost.

Global warming is the increase of the Earth’s average surface temperature due to the effect of greenhouse gases such as carbon dioxide emissions from burning fossil fuels or from deforestation, which trap heat that would otherwise escape from the Earth. Among the gases emitted when fossil fuels are burned, one of the most significant is carbon dioxide, a gas that traps heat in the Earth’s atmosphere. Over the last 150 years, burning fossil fuels has resulted in more than a 25% increase in the amount of carbon dioxide in our atmosphere. Many of the environmental problems faced today result from fossil fuel dependence. Fossil fuels like coal, oil and gas are used extensively as sources of energy in factories. Gas is used in households for various activities. Fossil fuels create a number of negative externalities associated with climate change.

In 2011, the Danish government unveiled its “Energy Strategy 2050” which describes how Denmark can achieve its independence from fossil fuels by 2050 and significantly reduce its greenhouse emissions. The strategy aims to reduce the energy industry’s use of fossil fuels by 33% in 2020 compared with 2009. The strategy involves a significant increase in renewable energy obtained from wind, biomass and biogas. By 2020, construction of new offshore wind turbines, coastal wind turbines and land-based turbines will approximately double the wind power production in Denmark. Wind power alone is expected to cover more than 40 percent of overall electricity consumption by 2020, compared with about 20 percent today. By 2020 more than 60 percent of electricity consumption will by covered by renewable energy. Meanwhile, strengthened energy efficiency efforts will reduce gross energy use by 6 percent in 2020, compared with 2006 levels. In reaching the goal, Denmark will meet the energy efficiency goals set out in the 2008 energy agreement, and the country will retain its position as a world leader in the area. The strategy offers an economically responsible path to the conversion of the Danish energy supply, and includes specific initiatives, that are all fully financed and which will not damage the nation’s competitiveness. Homeowners will experience moderate increases in the costs of heat and electricity, but will also be given opportunities to lower their energy expenses through greater efficiency. Companies can expect added expenses amounting to 0.1 percent of the rise in their gross revenue growth by 2020.

The Danish government will grant biogas production subsidies, subsidies for biogas infrastructure and subsidies for the use of biogas in industrial processes to encourage the establishment of biogas plants. They hope to replace coal with biomass by allowing producers and consumers of district heat freedom of contract. They will also mandate a 10% biofuel additive by 2020.

Carbon taxes and cap and trade schemes are cost-effective ways to reduce carbon emissions. A carbon tax refers to a tax directly linked to the level of carbon dioxide emissions. Denmark has a direct national carbon tax. This tax was implemented in 1992. The Danish carbon tax covers all consumption of fossil fuels with partial exemption and refund provisions for sectors covered by the European Union Emission Trading System, energy-intensive processes, exported goods, fuels in refineries and many transport-related activities. Fuels used for electricity production are also not taxed by the carbon tax, but instead, a tax on electricity production is applied.  The tax rate as of 2014 was USD31 per tonne carbon dioxide equivalent.

Different nations have come together on their own accord to create international agreements about how to maintain, protect, and care for the earth’s natural resources. These international agreements and treaties are often drafted during large meetings, or conventions, that representatives from various interested nations attend. Through a number of national and international agreements Denmark has committed itself to reducing the emission of CO2 and other greenhouse gases.  The Kyoto Protocol of 1997 is probably the most well known of the UN Framework Convention on Climatic Change updates concerning climate change. At a meeting in Kyoto, Japan, many nations agreed to set limits on carbon dioxide and other greenhouse gas emissions. The nations that signed the Kyoto Protocol agreed to a binding contract to limit their greenhouse gas emissions. To ensure the target is met, the EU-15 Member States have each taken on agreed national emissions reduction or limitation targets under what is known as the "burden sharing" agreement. These national targets are differentiated according to each Member State's relative wealth at the time of the agreement but collectively add up to the 8% reduction needed. The targets are legally binding under EU law. For Denmark, the target is -21% from the base year.

In these ways, Denmark is trying to fulfill its environmental responsibilities.

References:

http://www.kebmin.dk/node/845

http://www.worldbank.org/content/dam/Worldbank/document/SDN/background-note_carbon-tax.pdf

http://ec.europa.eu/clima/policies/g-gas/kyoto/index_en.htm

Global Warming and Externalities: Sri Lanka

Global Warming and Externalities: Sri Lanka

Global Warming is defined as a gradual increase in the overall temperature of the earth's atmosphere generally attributed to the greenhouse effect caused by increased levels of carbon dioxide and other greenhouse gases. The issue of Global Warming has risen to great prominence over the last 15-20 years. The rate at which the average global temperature is increasing is constantly rising and the trend is accelerating.

Fossil fuels are natural fuels such as coal or gas, formed in the geological past from the remains of living organisms. Coal and petroleum are two of the most commonly used fossil fuels. Coal is used to produce electricity and is also used to power steam engine trains. Petroleum is used to fuel cars and airplanes. However, the production and the use of fossil fuels leads to negative externalities. A negative externality is a cost that is suffered by a third party as a result of an economic transaction. Usage of fossil fuels leads to various negative externalities such as pollution and global warming.

Burning of coal and petroleum leads to emission of smoke and toxic fumes which cause air pollution and affect the quality of the air that humans breathe in. These toxic fumes also tend to cause smog and can lead to various respiratory diseases due to the large amounts of impurities present in the air. Also, with an ever-increasing demand for fossil fuels nowadays, more and more land is being dug up to mine for fossil fuels. Increased amount of mining leads to soil and ground pollution and destruction of the environment.

The burning of fossil fuels also leads to the release of carbon dioxide and other greenhouse gases and this leads to an increase in the percentage of greenhouse gases present in the atmosphere and an increase in the percentage of greenhouse gases present in the atmosphere leads to global warming. Greenhouse gases prevent heat radiations emitted from the Earth’s surface from escaping its atmosphere. With a larger amount of greenhouse gases present in the atmosphere, a larger amount of heat radiation emitted from the Earth’s surface will be absorbed and this will lead to an increase in the Earth’s temperature. Global Warming leads to an increase in the average global temperature and also leads to melting of polar ice caps and rising sea levels around the globe.

National level modelling, undertaken by the Sri Lankan Centre for Climate Change Studies, suggest that the changes in Sri Lanka broadly – but not completely – follow the regional expectations: The regional temperature trends are played out in Sri Lanka. By 2100, the increase in temperature during the southwest monsoon season (May to September) is anticipated to be 2.5 ºC, whilst the northeast monsoon season (December to February) is expected to yield a temperature increase of 2.9 ºC. The rainfall change is expected to be greater during the southwest monsoons (May to September) than northeast monsoons (December to February).

Also most Sri Lankan crops, and particularly rice, are produced at the top end of the optimum temperature range for cultivation, meaning that the anticipated increases in temperature could have a profound effect on yields.

There are several non-profit organizations within Sri Lanka petitioning for a more sustainable environment for both humans and species alike. The Sri Lanka Wildlife Conservation Society’s main purpose is to conserve the dwindling biodiversity of Sri Lanka. They have completed several conservation projects including a wetlands conservation project along with many habitat restoration missions in Sri Lanka.

 The National Climate Change Adaption Strategy (NCCAS) has prioritized a framework for combating and coping with climate change. There framework includes some key components that will be assessed from 2011 to 2016. The following is the framework the NCCAS will follow; Enable Climate Resilient and Healthy Human Settlement. Minimize Climate Change Impacts on Food and Security. Improve Climate Resilience of Key Economic Drivers. Safeguard Natural Resources and Biodiversity from Climate Change Impacts. This framework will help Sri Lanka offset potential climate changes in the near future. The NCCAS understands that stopping climate change is unrealistic, so many of their goals have to do with preparing and understanding what they need to do to prepare both economically and environmentally. 

Strategies to reduce air pollution in Sri Lanka include changes from biomass to other fuels (e.g. gas), the dissemination of improved cook stoves and improved kitchen design in households which will help reduce overall levels of pollution.

Sri Lanka also has ample scope for bioethanol and biodiesel production as well as wind power. Also the imposition of a 'carbon tax' of 15 to 41 dollar a tonne could cut emissions by 22 percent in the country.

Sri Lanka as a country has a plan set up to reduce pollution and global warming and to combat and cope with climate change. International Policies such as the Kyoto Protocol and the Copenhagen Accord are important because cooperation among governments is crucially important as a method of controlling and preventing negative consequences on certain resources such as the global climate and the ozone layer. International protocols bring countries together to fight the issues of carbon emission levels and pollution and global warming. International agreements are the only way global warming can be reduced and the rate of increase of average global temperature can be reduced.

http://www.lankabusinessonline.com/news/sri-lanka-could-cut-carbon-emissions-19-pct-with-green-moves:-adb-study/848129859

http://cleanairinitiative.org/portal/node/2332

http://www.pciaonline.org/node/613

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.