Climate Change and Markets: An Economic Analysis for ECON 1020

This report provides an economic analysis of climate change, focusing on greenhouse gas emissions and their impact on markets. It examines the present situation of climate change, including rising global temperatures and carbon emission levels, and explores the economic consequences, such as loss of land, disruption of water supplies, and health issues. The report also discusses government interventions aimed at controlling climate change and evaluates their effectiveness, considering international summits and agreements. Furthermore, the report provides recommendations for gauging the climate change situation, emphasizing governmental cooperation, differentiated responsibilities, eco-friendly technologies, and a shift to renewable energy. The analysis concludes that climate change has deteriorated the economic condition of nations and requires global cooperation to ensure future sustainability. Desklib provides students access to similar solved assignments and past papers.

Running head: PRICES AND MARKETS
Green-House Gas Emissions and Climate Change
Name of the Student:
Name of the University:
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Table of Contents
Introduction:................................................................................................................................................2
Present situation of the climate change:.......................................................................................................2
Economic analysis of climate change:.........................................................................................................4
Government intervention to control Climate change:..................................................................................5
Recommendation:........................................................................................................................................7
Conclusion:..................................................................................................................................................7
Reference:...................................................................................................................................................8

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Introduction:
Global warming is one of the burning issue that has been under constant research since
decade. Since 19th century, it has been observed that the greenhouse gases like carbon dioxide
leads to rise in the temperature of the global climate that provides negative impact to the natural
vegetation as well as different form of livelihood of the planet earth (Field and Barros 2014). In
addition to this it has been observed that there will be rise in temperature by 1.50C to 4.80C by
the end of 2100, which will lead to rise in the water level of the earth and the livelihood of the
living organism will be at stake (Change 2016). Not only this, in addition will rising temperature
cause a rise in temperature of the surface water too, which will make adverse situation for the
marine animals to live. According to the United Nation’s report climate change cause shift in the
weather pattern that possess threat to the natural vegetation and reduces their food production
capability (Intergovernmental Panel on Climate change 2015). Moreover, as mentioned earlier
rise in the temperature will cause catastrophic floods, which will impact the livelihood of all the
living organisms. Under this situation it has become easy to consider the importance of the
techniques that can deal with the catastrophic change in the global climatic pattern due to the
excessive carbon emission. This report is meant to analyse the same with main focus to the
present situation of the climate change and tracing whether there is scope for governmental
intervention in this regard or not. Moving forward, this report will provide summarized
overview in its conclusion and while doing so it will provide recommendations to gauge the
present situation.
Present situation of the climate change:
Global warming is ever rising since the latter half of the 19thcentury due to the rapid
industrialization, which has caused change in the climatic condition as well as the fall in the

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livelihood index of the earth irrespective of the land life or marine life (Seinfeld and Pandis
2016). From the figure 1, it can be seen that since 1962, carbon emission has increased over the
year sharply and it can be considered as one of the main reason for the change in the climatic
pattern around the world.
Figure 1: Carbon dioxide emission level over the years
Source: (Un.org 2018)
According to the estimation, it has been found that presently 140,000 people around the
world die due to the direct implication of the climate change (Watts et al. 2015). Under this
situation, it is easy to assess the importance of techniques to tackle the issue so as to make the
earth a survivable place. Since decades, there has been various intergovernmental progress to
deal with the severe condition of the climate change. However, it has been found that various
economies cause different level of carbon emission and takes different level of measure to deal
with the situation. Nevertheless, these ideology has failed to deal with the problem of climate
change and over time new protocols has arisen (Rowell 2017). For instance, it has been seen that
since the time of the Rio summit, there has been argument in approval of common but
differentiated responsibility that argue for the different level of the obligation taken by the
different nation depending upon their capability (Rajamani 2016). However, there has been
strong rejection of this argument by the developing nations arguing that the developed nations

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just simply wave off their responsibility of climate change, which is the direct outcome of the
historical performance of those nations.
Presently it has been seen that during December 2015 under the UN framework
Convention in Paris, 195 nations around the world has signed the first ever mutually accepted
agreement to deal with the climate change (Obergassel et al. 2015). The convention has decided
to keep the temperature change below 20 degree Celsius every year as their first aim and next to
this it aims to reduce the carbon emission level within the next 5 to 25 years (Rogelj et al. 2016).
However, sadly US has withdrawn that makes the present situation of the latest holistic deal is
still under dilemma.
Economic analysis of climate change:
Climate change is such a phenomena that has caused fall in the livelihood of the living
organism’s thorough reduction in the food production, loss of land irrespective of their nature
and through loss of species as well as the forest area (Junqueria et al. 2017). Thus it has become
important to analyse the climate change from the economic perspective so as to gather detailed
information regarding the effect of climate change on the economy. From the economic
perspective of the climate change following thins can be found (Urry 2015):
 Climate change has caused loss in land area due to the rise of the sea level
 Next to this it has been found that climate change caused disruption on the water
suppliers and agricultural output of the primary sector
 There has been enormous number of health related issues has arisen over the time that
has caused fall in the standard of living of the highly polluted states
 Catastrophic change or absurd alteration in the climate change has caused loss in the
agricultural output

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However, it can be found that the climate change has not only impacted the economy of different
states negatively. To some extent it has caused aided the economy in positive way. For instance
has caused rise in the agricultural output under the cold climate (Springmann et al. 2016). In
addition to this, it has been found that there has been lower number of deaths due to in the colder
regions of the world due to the rise in the temperature.
Considering the cost benefit analysis of the climate change, it has been found that there
has been substantial amount of fall in the productivity as well as loss in the national wealth. For
instance, it can be seen that during 2005 due to climate change, there has been loss of national
income $100 billion and the loss of 1,800 lives (Thamo et al. 2017). In addition to this,
according to different economic model to assess the impact of the climate change on global arena
has found that it will provide negative impact on the global economies ranging from 1% to 14%
on the total output (US EPA 2018). According to the latest economic estimation of the climate
change, it has been found that 5% change in the climatic condition cause loss in 1% Gross
Domestic Product (GDP) for different nations (Revesz et al. 2014). Considering this it is clear
that it is important to take serious actions to control the climate change condition so as to ensure
future sustainability of the different economies.
Government intervention to control Climate change:
It is well assessed that it is highly important to consider the climate change factor for the
future sustainability of the economy. For the purpose of controlling the climate change through
reduction in the carbon emission, government plays the crucial role. Over the time various
government of different countries has introduced different laws in order to gauge the present
climatic change situation (Higham et al. 2016). However, in absence of the world wide
summative effort, government has failed to produce something fruitful. From the figure 2, it can

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be seen that since the 19th century, there has been various international summits to bring down
the climatic change issue under control, however, very little has been done. Often large nations
and the developed nation opted out from participating into these programs stating the fact
biasness (Un.org 2018). Thus, successive governments has failed to improvise their plans for the
economy, however, the only factor that can bring change to the present situation of the climate is
the government. Thus moving forward, this report will provide recommendations in this regard.
Figure 2: climate change summits over time
Source: (Un.org 2018)

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Recommendation:
Recommendations to gauge the present situation of the climate change are as follows:
It is highly essential to bring in strong governmental cooperation so as to control the carbon
emission
 Nations has to take differentiated responsibility so as to control the climate change
depending upon their carbon emission level
 Newer eco-friendly technologies need to be introduced in different economy so as to
reduce the overall carbon emission level
 It would be ideal to shift to the renewable energy rather than depending upon the fossil
fuel so as to reduce the carbon emission which can effectively reduce the global
emission.
Conclusion:
The report has analysed the climate change effect from the economic perspective and it
has found that over the time there has been worsening situation than before due to the rapid
alteration in the climate change. Through the cost benefit analysis, it has been found that the
different economy has faced different level of impact of the climate change, however, from the
broader perspective it can be argued that climate change has deteriorated the economic condition
of the nation. The report has also found that, though there has been international summits to
control the effect of the climate change, however it has failed to provide anything fruitful in
absence of the global cooperation. Thus to conclude the report suggest to follow the provided
recommendations, in order to enhance the sustainability of the economies around the world in
future.

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Reference:
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Intergovernmental Panel on Climate Change, 2015. Climate change 2014: mitigation of climate
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Revesz, R.L., Howard, P.H., Arrow, K., Goulder, L.H., Kopp, R.E., Livermore, M.A.,
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Rogelj, J., Den Elzen, M., Höhne, N., Fransen, T., Fekete, H., Winkler, H., Schaeffer, R., Sha, F.,
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