When we turn on the television, flip through a newspaper, or search the internet,

we find ourselves being constantly bombarded by an ever increasing amount of

information about the phenomenon of global warming. Climate change has far
reaching effects that encompass all the basic elements of life for individuals
around the world: access to water, food production, health, and the environment.
People are beginning to realize that it is not something that can simply be
ignored. Evidence of flooding, extinction threats toward many species, and the
possibility of humans actually having to relocate have caught citizen’s attention
and they are looking for answers. Global Warming has become one of the most
pressing issues of modern society. The economic effects are very significant and
deserve our attention. The Stern Review on Economics of Climate Change argues
that, “[d]ecisive and strong international action is urgent: Delay means greater
risk, and higher long term costs.”

It is evident that all countries will be affected, although the extent to

which is not a uniform reflection of the damages they are inflicting upon the
environment. A specific countries part per million concentration output of green
house gases is referred to as flow. It is when these annual emissions of economic
activity combine as a stock concentration that negative temperature increases
and physical damages become the result. Consequently, even though the larger
industrialized economies are creating the bulk of the problem, they will not be
the first to feel the consequences. Instead the burden will be felt greatest by
those countries with limited economic resources, low levels of technology, poor
information and skills, limited infrastructure, unstable or weak institutions, and
inequitable empowerment and access to resources. Such nations have little
adaptive capacity and are highly vulnerable to climate change.

One of the most vulnerable means of productions is that of agriculture

because it is directly dependent on temperature, precipitation levels, and soil
conditions. These variables cannot be controlled and are essentially irreversible.
To add to the problem, the regional distribution is uneven. While production may
slightly rise in higher latitudes because of a possible increase in arable land,
overall, an assumed decline in available water will reduce production levels.
This destructive effect on global food production is the inverse of what a
functional future society will require to be sustainable. As global warming causes
the desertification of agricultural land, compounded with a shortage of water, the
result will lead to problems in supplying food and rising prices. This is of
particular importance for those countries which are net importers of food stocks.
Having to cope with the projected increase in population size and a decrease in
viable food reserves is something that we need to try and avoid. From an
economical perspective we could save a great deal of money and capital if we
preserve the land and resources we have on hand, instead of having to invest in
fabricating new means of food production for future generations.

The Intergovernmental Panel on Climate Change (IPCC) predicts that if we

go on with “Business as Usual”, by 2100 global sea levels will probably have
risen by 9–88cm and average temperatures by between 1.5 and 5.5 ◦C. Well at
first glance, one might consider these minuscule changes, and a mere
coincidence associated with the aging of planet Earth, they truly deserve our
uttermost attention. In addition to problems associated with food production one
can anticipate a rising sea level. Loss of land and structural damage will be soon
to follow. It is expensive trying to fight rising sea levels, and even the best flood
defences may be unsuccessful in preventing the inevitable. In recent years,
storms have also been on the rise. Events similar to that of Hurricane Katrina in
New Orleans are becoming all too common and have resulted in huge insurance
payouts. If current trends continue, one can argue that higher insurance
premiums will become the norm, and some areas may even become uninsurable.
We should also consider the affect of changing temperatures on wildlife. Many
species are extremely sensitive to change, and cannot adapt fast enough to cope
with current climate change trends. Although the exact economic cost is hard to
evaluate, as plants and animals go extinct we are losing out on opportunities for
future medications to be discovered and invented. Imagine how a cure for cancer
would reduce the strain on the healthcare system. Lastly we need to consider
migration. Overcrowding could present itself as a major problem, because those
that are suffering will relocate to countries that are “better” off. If we want to
maintain our better our current standard of living it is vital that we implement
change today, and not procrastinate till tomorrow, next week, or a month from
now.

Such factors will have a widespread affect so it is important to employ a

method of international burden sharing. A simple example of this could be
cooperation to bring forward new and improved technology; including the
sharing of risks on demonstration projects, and coordinating big research
projects. More specifically, one approach could be to impose national targets on
emissions as reflected in the Kyoto Protocol. A secondary, more probable
approach, would call for a set of actions that states would agree to undertake.
These mutually agreed behaviours would aid in the mitigation of emissions.

Perhaps the most reasonable way to allocate emission rights and the
obligation to reduce emissions would be to calculate a "business-as-usual"
trajectory of emissions for each country on the basis of recent history,
development prospects, and past experience with the evolution of greenhouse
gas emissions in relation to economic development. Then each country could be
charged with reducing emissions by a uniform percentage, chosen in
relation to global reduction requirements, relative to the assigned trajectory.

By doing show this would put countries on a more level playing field in regards to
population, GDP, and current pollution levels. Furthermore, it would make it
harder for countries to opt out of signing aboard and to point fingers at one
another. Such a system would make nations responsible for themselves and
would require them to assume accountability for their actions.

The European Emissions Trading Scheme (EU ETS) is currently the largest
emissions trading scheme and serves as a role model for an effective cap and
trade mechanism. The CDM (Clean Development Mechanism) plays an important
economical role as it aids in reducing the amount of future climate change. It
does so by first, improving the cost-effectiveness of GHG (green-house gas)
mitigation policies in developing countries. Secondly, by reducing carbon
“leakage” of emissions from developed to developing countries. Leakage is
where mitigation actions in one country or economic sector result in another
country's or sector's emissions increasing. (e.g. through relocation of polluting
industries from Annex I, developed countries to non-Annex I, developing
countries) Thirdly, it boosts transfers of clean, less polluting technologies to
developing countries. Such joint implications would benefit from an increasing
size of the carbon markets. By expanding schemes to new countries and sectors,
we could essentially reduce the flow of GHG’s.

Countless scientific studies have illustrated the damages generated by

green house gas emissions. They are external, global, large, long term, and
potentially irreversible. This presents a unique challenge for economists because
it could lead to the greatest and widest ranging market failure. The solution lays
in the fact that we know annual global emissions must be below ten. This is the
earth’s natural ability to absorb green house gases, anything above and the
stock will continue to grow. On the same note, we also know that a tone of
carbon does the same amount of damage no matter where it comes from in the
world. These two facts taken together make a carbon tax a likely solution to
current problems. The idea behind this would be a broadly comparable global
price for carbon reflecting the damages imposed on the environment by
individual manufacturing sectors, states, and countries. Instead of having to pay
additional taxes to the government the theory is that businesses would instead
invest money into research and come up with more efficient ways of doing
things. Perfecting current methods by reducing the amounts of harmful
emissions released into the atmosphere. As well as being more environmentally
friendly instead of just focusing on sales margins. Yes, at first it may be hard to
encourage on an international level, but such are the only solutions to a global
problem. We must build shared awareness, a sense of shared trust,
understanding, and cooperation. Respect will become important, and this fueled
by a notion of shared responsibility will lead countries to honor such
commitments.

It is time we accept the inevitable— the need to take action against the
problems associated with global warming, and the evils of procrastination. As the
temperature rises, the damages increase un-proportionately to that of
temperature. The longer we wait, the greater the consequence will be and the
harder it will be to get GHG’s at a manageable level. By definition, adaptation
requires that you know what you are adapting to, and you cannot do that in
advance. We cannot prepare for what we do not know, so it is best to use our
resources to preserve what we have. This is all the reason for us as citizens,
societies, and nations to implement the largest degree of progressive change
that we possibly can and respect planet Earth. If things like recycling and the
threat of extra taxes do not motivate you to change. Look at the economics of it
and see how vast of a financial burden we can eliminate for future generations, if
we simply implement small gradual changes today on an international level.
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