Lecture 13 Flashcards
Define global warming potential?
The relative strength of one unit of each gas in contributing to global warming
2 greenhouse gases currently increasing?
CO2
N2O
2 greenhouse gases currently decreasing?
Decreasing methane (some countries) CFCs
Explain how GW is amplified by positive feedback?
Increase warming -> decrease in ice cover -> decrease heat reflected -> increase warming
Explain how GW is counteracted by negative feedback?
Increase warming -> increase humidity -> increase clouds -> decrease warming
2 consequences of global warming?
Increase sea levels - large problem for low lying countries
Increase temperatures - more storms and hurricanes, problems for agriculture
3 issues with policy responses to GW?
- long time lag
- difficult to reduce CO2 (either have to decrease energy use or increase amount absorbed by trees)
- policies have to be accepted and used globally tf difficult to implement
Define carbon tax?
Tax on fuel in proportion to the carbon content of that fuel
What is the idea behind a carbon tax?
Price paid doesn’t normally reflect full cost, only private cost tf tax internalises external cost to society
3 advantages of carbon tax?
Low cost way to reduce emissions
Allows firms to reduce pollution to the point where MAC=tax
Encourages both industry and household to use less energy/switch to cleaner fuels
4 disadvantages of carbon tax?
Regressive tax
Difficult to set right level of tax
Identifying MEC is difficult
Countries free riding from other countries abating (could lead to fall in competitiveness)
PED equation?
PED = (%ΔQd)/(%ΔP)
XED equation?
XED = (%ΔQD(a))/(%ΔP(b))
Learn carbon tax diagram
Now
What are international marketable permits?
Permits scheme except acts between countries instead of firms
Advantages of international permits scheme?
- emissions ceiling can be set
- emissions ceiling attained at least cost
- developing countries may have excess permit supply tf developed countries may move production there
- CO2 has no local impact tf emission concentrated in certain regions isn’t a problem
- USA prefers permits to taxes tf likely to be successful
3 disadvantages of international permits scheme?
Allocation can be difficult (grandfathering, based on GDP/population?)
Would need a global institution to make it work
Sanctions would have to be agreed, put in place and enforced, also emissions monitored in order for it to work
