Climate Change

Question 1

Consequences

Answer 1

Scientists predict that at our current pace, the planet could warm by between 1.5°C and 4.7°C in the next 80 years.

Economists suggest could cost us as much as 20% of world gross domestic product (GDP).

Every place on earth is likely to experience negative consequences.

Question 2

Why so much inaction? Three answers

Answer 2

Free riding, Domestic distributive consequences, obstructionism

Question 3

1992 Rio Earth Summit

Answer 3

Major outcomes: Recognition of two major climate issues
Loss of biodiversity
Rapid climate change

United Nations Framework Convention on Climate Change (UNFCCC).

Strategy for achieving climate change has been to rely on voluntary compliance and markets to reduce reliance on green house gasses.

Question 4

Climate change mitigation: The free rider problem

Answer 4

Non-excludable benefits.

Non-rival in use.

Question 5

The distributive consequences of climate change mitigation.

Answer 5

Since the 1997 Kyoto Protocol, carbon pricing and taxes have been the main tools for controlling climate change.

Carbon pricing captures the external costs of green house gas emissions and ties them to their source.
25% global emissions.

Question 6

Carbon markets

Answer 6

Cap and trade systems.

Question 7

Obstructionists: Climate forcing asset holders (CFAs).

Answer 7

Oil and gas companies.

Electric industry

Heavy Industry

Question 8

Solutions

Answer 8

Carbon taxes: International taxation treaty.
15% minimum global corporate tax.

Geoengineering

Climate club