Environmental Economics Report: Solutions to Environmental Problems

This report delves into the realm of environmental economics, addressing key issues such as externalities, the mitigation of greenhouse gases, and the role of government policies in reducing emissions. The report begins by defining externalities and illustrating their impact through examples like pollution and the benefits provided by laborers, followed by an explanation of how government policies, such as taxation, can address these issues. The report then discusses the challenges associated with mitigating greenhouse gases, particularly concerning the free rider problem and the implications of climate change mitigation. Finally, it outlines several government policies designed to reduce emissions, including promoting renewable energy, reducing deforestation, and implementing carbon taxes. It highlights the importance of government initiatives in providing information and establishing programs to support energy conservation and sustainable practices.

Running head: ENVIRONMENTAL ECONOMICAL PROBLEMS
Environmental Economical Problems
Name of the student
Name of the university
Author note

1ENVIRONMENTAL ECONOMICAL PROBLEMS
Table of Contents
Answer 1........................................................................................................................2
Answer 2........................................................................................................................2
Answer 3........................................................................................................................3
References......................................................................................................................4

2ENVIRONMENTAL ECONOMICAL PROBLEMS
Answer 1.
Externality is the consequence of different economic activities that affects third
parties in the surrounding environment in negative and positive way. Pollution emitted by
factories, affects health of individuals is negative externalities and laborers who provide
productivity to the company is positive externalities (De Gouw et al. 2014). Proper pricing
done by government on pollution helps in reducing externalities by implementing tax on
individuals or factories that create pollution. Proper introduction of tax helps in increasing
cost of production or consumption which helps in reducing demand and output of good that
creates negative externalities (Ripple et al. 2014).
Answer 2.
Mitigation of GHG is a public good as other public goods and is vulnerable in
nature for free rider issues. Therefore, economics related to change in climate helps in
identification of Greenhouse gas mitigation as public good. However, adoption of change in
climate is known as private consumption (Elliott and Fullerton 2014). Implications of
mitigation of these are problem related to free rider game is limited in case of the adoption;
however, it changes in case of individual country. In individual countries, green house gases
mitigation is considered as the dilemma game of the prisoner (Ranson and Stavins 2016).

3ENVIRONMENTAL ECONOMICAL PROBLEMS
Answer 3.
Reasons for government to implement policy to reduce emissions
 Proper expansion of usage of renewable energy to be less dependent on the
fossil fuels and coal (Elliott and Fullerton 2014).
 Proper reduction in tropical deforestation to reduce emissions related to
global warming with proper investment of energy related technologies.
 Proper implementation of tax done by government will act as policy
instrument to achieve reduction in Greenhouse gases (Ripple et al. 2014).
 Proper information has to be provided by government for conserving energy
and establish programs will help in reducing greenhouse gases and will be
sustainable for environment and cap trade tax.

4ENVIRONMENTAL ECONOMICAL PROBLEMS
References
De Gouw, J.A., Parrish, D.D., Frost, G.J. and Trainer, M., 2014. Reduced emissions of CO2,
NOx, and SO2 from US power plants owing to switch from coal to natural gas with
combined cycle technology. Earth's Future, 2(2), pp.75-82.
Elliott, J. and Fullerton, D., 2014. Can a unilateral carbon tax reduce emissions
elsewhere?. Resource and Energy Economics, 36(1), pp.6-21.
Ranson, M. and Stavins, R.N., 2016. Linkage of greenhouse gas emissions trading systems:
Learning from experience. Climate Policy, 16(3), pp.284-300.
Ripple, W.J., Smith, P., Haberl, H., Montzka, S.A., McAlpine, C. and Boucher, D.H., 2014.
Ruminants, climate change and climate policy. Nature Climate Change, 4(1), pp.2-5.