1. Global Warming

Question 1

What are three key climate change impacts?

Answer 1

1. Agricultural output changes - hotter, flooding, droughts
2. Natural ecosystems suffer - forest boundaries change & more diseases
   2a. Ocean acidfication - warmer waters kill reefs & oceans are absorbing large amounts of CO2
3. Sea-level is rising - ice caps melting will result in flooding - Catastrophic outcome if ice sheets melt in Greenland & West Antarctic

Question 2

What four economic questions are asked about global warming?

Answer 2

1) How much pollution is too much?
2) Is the government up to the job?
3) How can we do better?
4) Can we resolve global issues?

Question 3

What is global warming?

Answer 3

It is a consequence of the greenhouse effect - which results in a carbon blanket that warms the earth.

Question 4

Explain why there are positive and negative feedback of the greenhouse effect?

Answer 4

Changing temperatures affect different parts of the earth and surface - leading to an acceleration of warming (positive feedback) or deceleration (negative feedback)

Question 5

Give two examples of negative feedback of the greenhouse effect?

Answer 5

1) increasing cloud cover will reduce the amount of radiation entering the earth’s atmosphere
2) higher rates of carbon dioxide will lead to higher rates of plant growth and thus trapping carbon dioxide

Question 6

Give four examples of positive feedback of the greenhouse effect?

Answer 6

1) higher temperatures may generate widespread forest fires & forest dieback
2) emission of methane & CO2 currently trapped in frozen bogs & peat fields at high latitudes
3) heat-absorbing darker earth under ice shields exposed
4) reduced capacity of ocean organisms to fix carbon dioxide in their shells.

Question 7

What is a runaway greenhouse effect?

Answer 7

Where warming feeds on itself and quickly accelerates the driving up of temperatures

Question 8

What are the ways to determine how much is too much?

Answer 8

1) The Efficiency Standard - which relies on formal benefit-cost analysis
2) The Safety Standard -which reduces pollution to ‘safe’ levels unless the costs of doing so are prohibitive
3) The Ecological Sustainability Standard - requires protection of natural ecosystems from major changes unless costs are so prohibitive

Question 9

What do efficiency advocates argue?

Answer 9

That aggressive actions will impose excessively high costs on the current generation and reduce investment in capital goods, research and education and reduce the welfare of future generations.

Question 10

What do safety and ecological sustainable advocates argue?

Answer 10

That major greenhouse gas cutbacks are needed for welfare of future generations.

Question 11

What is the ethical debate?

Answer 11

Is the debate over which standard is ‘right’ between efficiency vs. safety/ecological sustainability.

Question 12

What are the two obstacles that stand in the way of effective government action?

Answer 12

• Imperfect information - difficult to obtain accurate information on the benefits and costs
• opportunity for political influence - how should political power be used? where? and is it effective?

Question 13

What are the two sides of the political influence?

Answer 13

1) Conservatives - believe government intervention is a necessary evil and should be minimised - Conservative claim government serve special interest groups
2) Progressives - view government as capable of promoting an activist agenda and to serve the public interest

Question 14

What are the possible actions that government could take to control carbon emissions?

Answer 14

1) Command and Control regulation
2) Incentive based regulation
3) Government intervention for clean technologies -such as building codes etc.

Question 15

What is command and control regulation?

Answer 15

Government regulates CO2 emissions by mandating the adoption of particular types of CO2, abatement technology. It is criticised for being centralised, inflexible and is more costly.

Question 16

Which approach do economists believe is best and what are the two major policy tools?

Answer 16

Incentive-based regulation:

• Pollution taxes (tax on emission levels)
• Cap and trade (caps the level of emission and then auctions permits)

Question 17

What are the major issue to solving the question ‘can we resolve global greenhouse issues?’

Answer 17

• Public good - so others get a free ride (less incentive)
• Difficult for third world countries - as they need to grow economically, so unlikely to stop
• Difficult to develop effective agreements across the world - eg Aust & US are major polluters and are non-participant to Kyoto agreement.

Question 18

What would be one way to potentially solve the greenhouse problem?

Answer 18

A worldwide cap and trade scheme where every country gets a limit and they can ‘purchase’ additional ability to emit greenhouse gasses from poorer countries, which will help them grow economically.