University Economics Report: Global Warming Analysis and Policies

This economics report delves into the multifaceted issue of global warming, examining its trends, causes, and implications on various economic factors. It begins with an introduction that highlights the debate surrounding global warming, emphasizing the rise in carbon emissions and greenhouse gases, and the subsequent increase in global temperatures. The report then analyzes the global warming trend, presenting data on rising temperatures, carbon dioxide emissions, and sea levels. It further explores the economic impacts of climate change, discussing how it affects crop yields, precipitation patterns, and the potential for increased disease outbreaks and natural disasters. The report then shifts its focus to environmental policies, comparing and contrasting market-based approaches, such as carbon taxation, with command-and-control mechanisms. The report concludes by summarizing its findings and offering recommendations for mitigating the effects of global warming.

Running head: ECONOMICS ASSIGNMENT
Economics: Principles, Models and Policies
Name of the student:
Name of the University:
Author note

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Table of Contents
Introduction:...............................................................................................................................2
Global warming trend and its implication on the livelihood:....................................................3
Economic impact of the climate change:...................................................................................5
Environmental policies to curtail the global warming:..............................................................7
Comparative analysis of regulation and market based approach for global warming:..............8
Conclusion:................................................................................................................................9
Reference:................................................................................................................................10

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Introduction:
Global warming is one of the debateable issue which is under rigorous analysis since last few
decades. With rise in the level of carbon emission and other greenhouse gases reflected heat
from the earth’s surface is being trapped in the air which is raising the global temperature
causing catastrophic effect on the various economic factors as well as possessing threat to the
living hood of the planet earth (Chauhan et al. 2014). Global warming is not only enhancing
the externality to the human being, rather from the broader perspective it can be seen that the
whole living organism is being harmed through the rise in the global warming. Global
warming has the ability to enhance the overall all global temperature and while doing so it
will enhance sea level leading to lack of the habitable land in near future (Change 2018).
With the ever increasing level of global warming has been affecting the various economy
around the world too. It can be seen that the various economies around the world has been
facing reduced production compared to the forecasted level and rise in temperature is
accounted as one of the main reason for this. Under this context, it has become crucial for the
researchers to analyse the global warming and its trend in order to depict what can be done so
as to control and mitigate the effect of the global warming.
Under this context, this report is aimed to analyse the global warming effect and its
impact on the economy through analysing the reasons for occurrence and the trend of the
same. In addition to this the report will consider the analysis of various policies taken by the
government for reducing the effect of the global warming. Moving forward, this report will
analyse the effect of the command and control mechanism and market based approach
utilised for controlling the global warming and then it will portray which one is best for
curtailing the externality of the global warming. To conclude the report will provide
summarised overview of its findings and then it will provide the various recommendations
for the same.

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Global warming trend and its implication on the livelihood:
Global warming is defined as the climate change that leads to rise in the average
temperature of the earth’s climate system observed through the century scale. One of the
main concern of the global warming lies within its negative externalities that gives rise in the
various catastrophic effect on the economic performance as well as the performance of the
factors of production (Karl et al. 2015). During the last seven decades it can be observed that
the global warming has been rising at a rapid speed, which is evolving itself day by day
through the rise in the carbon emission. One of the major impact of the global warming is the
rise of the temperature around the world. According the researchers it can be seen that due to
rise in the greenhouse gases, reflected heat by the soil of the earth is being trapped in the air
that leads to rise in the overall temperature of the environment. With the rise in the carbon
emission and other gases like methane and humidity, global warming has increased by a large
extent. As it can be seen from the figure 1, global temperature has been rising at 0.90C
annually and the rise in the temperature has been aggravated by large extent since the 1950,
when the world economy started to face industrialisation (Change 2018). Over the year, there
has been rise in the global temperature that has made catastrophic effect on the ice level in
the arctic region and has allowed the production from the agricultural sector to fall from the
perceived level. Thus it can be entailed that global warming has far reaching effect to the
human life by affecting the production and sustainability capability of the earth (Vuille et al.
2015).

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Figure 1: Annual average global temperature anomaly
Source: (Change 2018)
From the figure 2, it can be seen that carbon dioxide emission has been rising at an
alarming rate during the recent decade. The upward slopping trend line highlights that over
the last ten years carbon dioxide Parts Per Million has been increasing at a sharp rate (Desmet
and Rossi 2015). This rise in the major greenhouse emission has caused the global warming
to rise. It has caused loss in land and rise in the water level.
Figure 2: Carbon dioxide PPM
Source: (Change 2018)

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As per the figure 3, sea height around the world has been rising sharply since the
decades. According to the estimation, if the present trend of the sea level rise continues, then
sea level will rise by 4 ft. by the end of 2100 making a lot of place slip under into the water
making land for living scare around the world (Change 2018). Economists argue that, if there
is loss in the landmass, then it will reduce the livelihood of the living organism because loss
of the land will cause fall in the production capability of the economy as well as make the
biodiversity vanish from different part of the world.
Figure 3: Sea level rise
Source: (Change 2018)
According to the latest report, there has been fall in ice mass in the Antarctic region
by 127 gigatonnes annually and since 2000 and if there is no plans to control the same, then
the ice blanket of this region will vanish within the next few years. It will rise the temperature
of the earth further making it inhabitable.
Economic impact of the climate change:
Economic impact of the climate change is vast and far reaching in different sectors.
Through the rise in the global warming it can be seen that there is epidemic rise in the
negative externality. As the direct outcome of the rise in the global warming, it will increase

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the frost free season, which will increase the crop yield (Visser et al. 2016). At first instance,
it may look good, however, there will be rise in the several partial impact of the rise in the
frost free schedule. During the frost free time temperature will gradually rise and it will affect
the sustainability of the pest. With the larger number of pest, there will be rise in the loss of
crop, which will deteriorate the situation in coming days. On the other hand, precipitation
pattern around the world will change drastically. With the rise in the precipitation level, there
will be fall in the productivity and lead to fall in the world wider output of the crops
(Santamouris 2014). It will enhance the inflation rate around the world and with the capitalist
firm utilising the differentiated pricing in different regions will aggravate the situation of
food crisis. It will further deteriorate if the land loss occurred by the global warming is
considered.
As per the measurement of the NASA, during the next two decade, there will be rise
in temperature by 1.80C and it will increase the sea level substantially making the landmass
go under the water level. Besides this, there will be drastic change in climate of the world,
which will lead to change in the production pattern in various places around the earth. As per
the prediction, southwest heat waves will increases making the abnormal climatic
environment. It is projected that summer temperature around the world will rise by 5 to 6
degree and in several places like middle east will be inhabitable with the rise in temperature
(Karl et al. 2015). It will increase the rise in the various diseases and epidemics may break
out as it can be seen in the case of the Ebola virus. Researcher of NASA predict that there
next two decades will be hotter than ever in the history of the earth depicting the poor
condition of the habitability of the earth (Change 2018). As per the prediction, there will be
rise in the occurrence of hurricanes, which will cause fall in the productivity and loss of the
livelihood as well as lives all around the world. Forecast suggest that rise in the number of

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category 4 and category 5 hurricanes and associated storm will eventually rise making the
economy around the world dwindling in front of the natural disaster (Santamouris 2014).
One of the off bit impact of the global warming will arise in the form of climate
driven refugees (Visser et al. 2016). As it has been stated, with the rise in the temperature,
various places around the world will be inhabitable forcing the population of that area to shift
from there to other places. In addition to this there will be impact in the irrigation system too,
which will either be dried up or flooded with the water making the farming vulnerable in
front of the global warming. Moreover, cool vulnerable livestock will face it hard to survive
under a hotter climate leading to fall in the supply of the food (Change 2018). Under this
context, it is essential for the government to take necessary steps in order to deal with the
climate change effect otherwise it will soon happen that earth will become an inhabitable
place.
Environmental policies to curtail the global warming:
Since decades there has been rise in the concerns regarding how to curtail the impact
of global warming and over the years, it has been found there are two distinct procedure to
deal with the global warming. One of is market driven carbon tax approach and the other is
command and control model which (Nordhaus 2014)

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Figure 4: Social cost and private cost
Source: (Tol 2017)
As it can be seen from the above diagram that capitalist firms produces more amount
of cash goods that gains them higher revenue. MPC curve shows the capitalist level of output
that leads to higher amount of carbon emission. If through market based approach, carbon
taxation is utilised, then it will shift the supply curve from MPC to MSC leading to fall in
production, which will ultimately produce only that amount of goods and services which is
beneficial for the society and reduces the greenhouse gas emission (Cotana et al. 2014). It
will cause societal benefit rise by the orange shaded zone.
Contrary to this, command and control mechanism makes it essential for the firm to
reduce the greenhouse gas by limiting the production. If the firm observes that the limit of
production is less scare, then it may reduce the emission by the means of investing more
amount of fund into greener technology (Smith and Leiserowitz 2014). However, it may so
happen that the firm opts to enhance its operation if the limit is higher leading to rise in the
production of the greenhouse gas emission.

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Comparative analysis of regulation and market based approach for global warming:
A long standing debate is there regarding the effectiveness of the market based
approach and regulation based strategy to deal with the growth of the global warming. As it
can be seen that both the strategies has different advantages, however, which one is best for
the present situation is under debate (Urry 2015). Considering the case of the market based
system, it can be seen that it is based on the carbon taxation, which fails to predetermine the
level of carbon emission at the end of the year so does it fails to control the production of the
greenhouse gases (Cole 2015). In addition to this, there is lack of measurement to control the
carbon emission through the carbon taxation that makes it primitive in nature. However,
when it comes to curtailing demand of the goods and services that produces more amount of
carbon emission, then market based approach is the best one. Contrary to this, command and
control model pre determine the carbon production level for the each entity depending upon
its level of operation. Though it is effective in nature, however, it requires huge amount of
investment and the technological advancement that makes it hard for the firms of different
region to comply with the norms (Bailey 2016).
Under this scenario it become evident that though the market based approach of
carbon taxation is primitive in nature, yet it is effective to curtail the carbon emission through
reducing the demand of goods and services of those who are entitled to produce much
amount of greenhouse gases.
Conclusion:
From the above analysis it has been found that significant amount of threat is looming
over the sustainability of the livelihood in the world due to rise in the global warming. With
the rapid increase of the global warming with the rise in the greenhouse gases like carbon
dioxide, methane and others are making the sea level rise and climate hotter than the
sustainability range in various parts of the world. Negative externality of the global warming

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has been affecting the productivity around the world and reducing the crop production. Under
this situation, it has become essential to introduce various plans for curtailing the implication
of the global warming. As the report has found through the analysis, market based approach
is one of the best possible strategy that need to be implemented properly. With the help of the
command and control model, which is a market based approach of curtailing the global
warming will aid the world environment to get rid of the carbon emission through
predetermined the level of carbon emission depending upon the level of activity of the entity.
To conclude, it can be entailed that, global warming is the man made problem that has been
affecting the overall economy of the world, thus it need to be eliminated at earliest other earth
will soon become an inhabitable place.

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Reference:
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Change, N. 2018. Global surface temperature | NASA Global Climate Change. [online]
Climate Change: Vital Signs of the Planet. Available at:
https://climate.nasa.gov/vital-signs/global-temperature/ [Accessed 21 May 2018].
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Nordhaus, W.D., 2014. A question of balance: Weighing the options on global warming
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