Paper Example on Greenhouse Gas Emissions and Climate Change

Introduction

Greenhouse gas emissions is a topic that has been debated for decades now. The emissions are fundamental to the energy system of the world as well as to its level of food production. The amount of carbon dioxide emitted, which is the predominant gas that is implicated in the climate change, intrinsic to the combustion of fossil fuel most specifically, thermal energy is produced by breaking down the chemical bonds in the carbohydrate oil, natural gas, and coal and then oxidizing the components to carbon dioxide and water. It should be admitted that cheap energy cannot be obtained without emissions of carbon dioxide (De Klein et al., 2008). Just like methane gas which is an important greenhouse gas in its standards, is essential in the prevention of hydrogen gas build-up in the anaerobic decomposition and digestion. It, therefore, has to be released. However, it should be admitted that the level of emission of carbon dioxide gas can be controlled to reduce its effects on the environment that causes climate change.

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It is worth noting that climate change is the overall among all externalities. This is because it is the most common, larger, more complex issue and it is more uncertain than any other environmental problem or concern. It is admittedly true that the sources of greenhouse gas emissions tend to be more diffuse than any other environmental problem ever known. This is because every farm, every company, and virtually all the households contribute to the emission of some level of greenhouse gas (Kennedy et al., 2009). The effects of these gases can never be understated because they have had devastating and pervasive effects on the lives of both plants and animals. The weather changes as a result of these gases impact negatively on agriculture, health, use of energy among other aspects of nature. The causes and consequences of climate change are very diverse and mostly felt by vulnerable populations from low-income countries (Change, 2007). The report, therefore, intends to put bear the various economic issues that affect climate change and how interventions to tackle this problem using economic parameters successfully.

Firstly, it is essential to understand that various microeconomic interventions can be used to explain the concept of climate change as a result of the greenhouse gas effects. In this case, the various market failures and possible interventions will be necessary (Chen et al., 2011). The most critical aspects that the report noted is the market failures which is a situation in which the market on its own lacks the capacity to allocate the resources on its own efficiently. It is also prudent to talk about externalities because these are the factors that exist when production and consumption of a particular product yields both positive and negative effects on third parties and are neglected or not accounted for in the price of the goods and services sold to them. This is the case with the problem of climate change which is caused by the effects of greenhouse gases initiated by other people, firms or countries (Change, 2007). They are therefore the uncompensated effects of an individual's actions on the well-being of others.

In the production process, for example, there will be emissions that cause air pollution. This is a negative externality. The air pollution will automatically lead to health risks for those who are around the production locations and breathe the air. This is a possible market failure because it is unable to adjust and control the negative externality. This can be achieved by appropriately allocating the resources and putting them to good use utilizing allocative efficiency. As a result of such externalities and market failures, the cost that the society will incur in producing a unit of the goods will be the cost as determined by the private sellers added to cost by bystanders who are affected by the polluted air.

Regarding the topic of the report, it is true that in a perfectly competitive market, property rights are defined and enforced. This, therefore, indicates that both goods and services are rivalrous as well as excludable. In the real sense, it should be noted that many products are linked with because of problems with property rights. This is the case with the issue of greenhouse gas emission (De Klein et al., 2008). Concerning public goods and in line with market failure, it should be noted that private goods and club goods do not illustrate problems of market failure. This is because they are appropriately and efficiently allocated in the market because they have prices that are attached to them and also because they have individual private owners. This is contrary to the public goods and other shared resources consumed by the public that present massive market failures. This is because externalities will arise simply because something of value, for example, air that the public breathe lacks any price that is attached to it. The disadvantages as a result of air pollution have led to massive health problems across the globe. Public goods are very important, yet they are not treated as of value compared to other private goods. Just like air is vital for breathing as a public good, so is the defense where others will be better off if an individual was to provide it and not paid for the services. At the same time, if one uses a shared resource, say, fish in the lake, other people would be left worse off and yet they are not compensated for the loss. This is the major problem with the emission of greenhouse gases into the atmosphere which adversely affects the climate change as owners of the companies and other individual emitting these gases do not compensate the public who are affected by the emissions.

As a result of these externalities, decisions that are made privately concerning production and subsequent consumption of these products always lead to market failures because of inefficient outcomes that impact negatively on the lives of other people (Brown, 2001). This is the actual case of greenhouse gas emissions where the decisions of private individuals to establish companies in areas that they are not fit to be at the end up affecting the lives of many people. Government intervention which is a public solution can be integrated which can potentially correct this market inefficiency and raise the economic well-being of the people.

To tackle the menace of climate change as a result of increased emissions of greenhouse gases, a possible move can be intervention by the affected governments (Change, 2007). The response of the government will help to curb this problem of market failure which is a significant externality with the objective of reducing the amount of greenhouse gases' emission into the atmosphere which has adversely affected the climate hence interfering with the living things.

In a bid to control the emission of greenhouse gases, the government can intervene directly by controlling prices in the market so that the government regulates the products and services sold by such companies. In this case, the government can opt to price the products higher so that most people will not be able to afford the goods and services. This will make production to slow down thereby lowering the production level of such companies. This reduces the greenhouse gases produced as production levels are low. At the same time, the government, on the other hand, can lower or provide substitutes hence making the prices of a given company expensive. In this case, the company will lose customers and cease to produce.

Another way in which the government can control the emission of these gases is by indirectly getting involved through increased taxation on the products of the producing companies. This will raise the prices thereby they become expensive hence reduced demand. As a result of the reduced demand, the companies will cease to supply hence will stop production. Another effect associated with this move is that the government can increases taxes to raise finance to provide services that will counter the effects of greenhouse gas emissions that affect the environment (De Klein et al., 2008). This can be used to purchase fertilizers for farmers coming from the areas affected by the emissions so that their farm fertility is maintained.

It is important to note that government taxes both households and firms in various markets to fulfill the above-stated goals, that is, to provide it with the required administrative resources to effect various interventions and also for corrective measures to reduce the externalities posed by some firms.

However, it cannot be denied that climate changes as a result of greenhouse gas emission have led to unprecedented changes in the consumer and producer surpluses (Houghton, 2008). The changes in the prices of crops and the reduced level of production and consumption of agricultural products have had more significant implications for the economic welfare of both consumers and producers of these products. Consumer surplus helps to measure the value that consumers receive by their willingness to pay. This is the maximum price that a consumer is willing to pay for the quantity demanded of the product. It is, therefore, the difference yield between what a consumer was willing to pay and what he pays. It should be understood that with cases of adverse change in the climate, this surplus is lost. On the other hand, producer surplus measures the difference between the price at which the producer is willing to sell at and the amount he finally settles for. This is the gain by the producer in the trade.

Lastly, it is worth to echo the efforts that media has had in covering the issue of greenhouse gas emission and its effects on climate change across the globe (De Klein et al., 2008). This has had huge impacts on the opinions that the public have regarding climate change. Media has acted as an informer and mediator as it has continuously relayed the views of scientists on climate change. Media gives the information to the public regarding the global recorded temperatures, and it succinctly puts it that human activities induce these emissions. This has been agreed by various scientific bodies as well as national and international bodies (Sampei and Aoyagi, 2009). Media has increased awareness about this phenomenon that has made world leaders to convene various conferences to deliberate on the possible measures to put in place to help combat increased greenhouse gas emissions.

The attention of the media has also been high in a nation which is carbon dependent like the United States which contributes the highest percentage of carbon in the atmosphere (Absi et al., 2013). Without the efforts that the media has placed to cover this situation, these gases would be full in the atmosphere and living things would be at a higher risk that now. This is because media acted as a watch to many countries and companies that made them refrain from production.

Having observed all the aspects of this report on the economic issues of greenhouse gas emissions and its effects on the climate change, it is important to conclude that climate change is a global concern that requires a delicate deliberation by the world leaders. This will help to avert its adverse effects that it places on the people. By addressing the various market failures that contribute to the externalities, we would be in a position to control the emissions of the gases thereby solving the problem of climate change. This needs a concerted effort of all concerned parties right from private owners and the government. Market failures can then be addressed to ensure that goods are appropriately used to avoid instances of wastage.

Further, to deal with the problem of climate change, as stated above, the g...