Economics 1 Assignment: Public Goods, ETS, and Climate Change Policy

This economics assignment examines the characterization of greenhouse gas (GHG) mitigation as a public good, emphasizing the shared benefits for all individuals and the rationale behind governmental policy interventions to address climate change. The assignment explores the implications of GHG emissions on society and explains why all countries globally participate in mitigation efforts, thereby defining it as a public good. Furthermore, it discusses the government's role in mitigating climate change, highlighting the increasing temperatures and sea-level rise. The assignment also analyzes the effectiveness of Emissions Trading Schemes (ETS) as a preferred policy instrument, referencing the Australian government's approach and the advice from the Climate Change Authority. The conclusion suggests that while ETS is crucial, supplementary measures might also be warranted to achieve emission reduction targets. The assignment uses several academic references to support its arguments.

ECONOMICS 1
Economics Assignment
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ECONOMICS 2
Why the mitigation of GHG’s is characterized as a public good.
Reducing greenhouse effect is a social benefit since the lives of human beings and all
forms of nature makeup of the environment and require to be protected (Bernauer & Bättig,
2009). With this aspect, practical economics has been applied in the field of climatic change.
Mitigation of GHG’s are said to be a ‘public good’ because everyone benefits at the end of it.
Implication
All this implies that each individual is involved and incurs a cost during the process of
curbing greenhouse emissions of gases not considering how much is contributed by each one.
Greenhouse effect has got a negative implication on the entire society even when it is performed
by one individual. Therefore, all countries globally do participate in mitigation of greenhouse gas
emissions and in turn each one gains from the process that the reason as to why GHG is termed
as a ‘public good’ (Bernauer & Bättig, 2009).
The rationale for the government’s policy intervention to mitigate climate change
In most of the countries, it is the role for the government to intervene and solve the
problem of rampant climate change (Cimato & Mullan, 2010). In the world today, climate
change seems to be graded among the commonest challenges faced. To reduce the problem
of greenhouse gas emissions, action from globally are required (Reviva et al, 2009). Since
the government is responsible for guarding people and their environment, it is then essential
for it to intervene and help its citizens to curb climate change (Reviva et al, 2009). Compared
to the previous years, the temperatures are more high and the ‘sea-level rise’ too in the
twenty-first generation. Climate change has been rampant and thus it should be addressed as
soon as possible by responsible governments (Cimato & Mullan, 2010).

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Why an ETS is a preferred policy by the government
Emissions trading schemes is very effective to any government. The government of
Australia was advised by the Authority of climate change to apply at least two ‘emissions
trading schemes’ (Slezak, 2016). This was intended to tighten regulations so as to achieve the
2030 Australian emission targets and also match them together with those for ‘International
climate change’. The government of Australia under the influence of the council of
Australian governments has devoted to the policy regarding Emissions Trading Scheme
(ETS) as the most effective and consistent method in accomplishing the targeted goals of
reducing the greenhouse gas emissions (Slezak, 2016). ). The reason for the move on EFTS
is to put the ministry on pressure and strengthen climate policies in the country. Also, with
the system of EFTS in process, a key issue for policy is what supplementary measures may
be warranted. In conclusion, there is a question as to whether policy measures to reduce
emissions that were set in the absence of a market price for carbon would still serve an
essential purpose (Slezak, 2016. However, as the country thinks of achieving ‘Emissions
Trading Schemes’ to reach its targets of reducing gas emissions in 2030 the officials should
consider and meet its promise of keeping warm (Slezak, 2016).

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References
Bernauer. T & Bättig, B,M. 2009.National Institutions and Global Public Goods: Are
Democracies More Cooperative in Climate Change Policy?Retrieved from:
https://www.jstor.org/stable/40345935
Cimato, F., & Mullan, M. 2010. Adapting to Climate Change: Analysing the Role of
Government. Defra Evidence and Analysis Series Paper 1. Retrieved from:
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/
file/69194/pb13341-analysing-role-government-100122.pdf
Reviva, H., Åsa, L & Martine, V. 2009. "Climate Change in a Public Goods Game: Investment
Decision in Mitigation versus Adaptation," Working Papers in Economics 416, University of
Gothenburg, Department of Economics.
Slezak, M. 2016. Australia needs two emissions trading schemes, Climate Change Authority
says. Retrieved from: https://www.theguardian.com/environment/2016/aug/31/australia-needs-
two-emissions-trading-schemes-climate-change-authority-says