Cap and Trade System

Most recently, California has adopted the 'cap and trade system' in an attempt to reduce carbon emissions and encourage investments in reducing emissions.
Below is the link:

http://www.huffingtonpost.com/2012/11/12/california-cap-and-trade_n_2118991.html?utm_hp_ref=green

A cap and trade strategy works to reduce carbon emissions via financial incentives; “caps” establish emissions limits and fines for exceeding those limits, while companies operating below their carbon limits can sell or “trade” their offsets to companies that are operating above the limits. By having to pay to emit carbon into the environment, economists propose that this creates an incentive for research and development.

Is this effective? An analysis by the New Energy Finance research firm estimated that the trading system accounted for about 40 percent of the drop in Europe's greenhouse gas reductions in 2008.
Warren Buffet is strongly against a cap and trade system as he believes it is a regressive tax, which will only be passed on to consumers in the form of higher prices.

With rising energy prices, firms will look for ways to cut their energy usage. In addition, electrical appliances should be made more efficent to also reduce household carbon emissions, hence, reducing overall emissions across the world.  

Climate Change in Monetary Terms

'The Skeptical Economist' by Jonathon Aldred is an interesting read in analysing how economic and ethics link with analysing 'what and whether' an action should be taken when dealing with climate change.

Traditional economic analysis recommends that a cost benefit analysis should be taken, but common sense tells us that it is not possible to monetarise all costs and benefits of climate change. Policies to tackle climate change today may cost a lot, but in the future it will save many lives. Economics would value the lives taken in terms of money. Once again, is this a sound method to use and can we put a monetary value on life?

The key organisation in charge of dealing with climate change policy on an international level is the Intergovernmental Panel on Climate Change (IPCC). The IPPC argued that the conventional economic way of placing monetary values on life reflect market prices is wrong. This way of valuing life leads to poor people having a low value of life, which means they are worth less! The IPCC report placed a value of $1,500,000 on lives in rich countries, $300,000 on middle-income countries and only $100,000 on poor countries. This difference also reveals that climate change policy is not beneficiary in poor countries, relative to rich countries.

Economists discount the future, which means that outcomes in the future matter less. Does this not ignore the gradual benefits of implementing a climate change policy? It is true that the outcomes of the climate change policy may be uncertain, but is it not our duty to protect the environment regardless. Famous philosopher John Rawls uses a 'veil of ignorance' to highlight the importance of acting in a way that looks after the wellbeing of future generations. Under the 'veil of ignorance' actions and decisions should be made, disguising which class,society and even generation you belong to making it just for everyone. This idea takes away self-interest and the discriminatory factors experienced today due to wealth diffrences. Rich countries have the resources to invest in research and development to reduce their carbon footprints, whilst poor people are even disregarded on how much their life is worth.

Malthusian Epoch

The Anthropocene era is thought to have began with the Industrial Revolution. This is also the time at which British economist Thomas R Malthus published his most influential Essay on the Principle of Population. According to his Malthusian model, an increase in living standards will simply cause population to grow, reducing income because land is fixed and the power of population is indefinitely greater than the power in the earth to produce subsistence for man.

However, this relationship did not last for very long and in 1965, economic and agriculture development economist, Ester Boserup argued that agricultural productivity is not fixed, but is endogenous to population pressures. On the one hand, Malthusian theory argues that agriculture is inelastic, but Boserup claimed that technological advancements are encouraged in society to find alternative ways of feeding society. This is a long-term process, but population can double several times without having to face starvation or lack of employment. She sets out this theory in her book The Conditions of Agriculture Growth. Boserup model of agriculture itensification, is characterised by land-saving investment, adoption of improved agriculture practices, development of nonagriculture economic activities, diversification of income sources etc. In fact, William Easterly, an American economist, specialising in economic growth and foreign aid, finds this relationship to exist and states that between 1960 and 1990, population growth has doubled, but food output has tripled supporting this view.

It is true, that the more number of people there are on earth, the more greenhoue gases will be emitted. However, the more people there are, the more incentives there will be to develop renewable resources and adopt strategies to reduce our impact on the planet. An interesting journal by Rahman et al. (1993), claims that population is not a contributor to climate change and emphasis should be made on reducing per capita emissions, rather than slowing population growth. Overall, the empirical evidence points out that Malthus theory does not hold and humans are capable of making changes to survive. However, we still need a clear strategy to prevent damage to our planet.

Humans or nature?

Jeffrey David Sachs, American economist, shares his concern about  human destruction of the habitat of other species and how this is leading to a massive extinction of plants and animals in his book 'Common Wealth'. Are humans entirely responsible for the megafaunal collapse?

Humans can be described as ecosystem engineers because since we have arrived, we have made many changes. In fact, the Palaeolithic era, which occurred 2.6 million years ago, are linked to major megafauna extinctions. It is unclear whether humans were responsible or if it was climate induced. According to an interesting journal, A D Barnosky et al. Science 2004, only rarely have island megafaune been demonstrated to go extinct because of environmental change without human interaction. Overkill of slow breeding pret is more likely when hunter populations become large. Another study by Flannery in 1989 also claims that there is a strong correlation between the arrival of humans in Australia and the extinction of megafauna in the Late Pleistocene.
On the other hand, in J L Gill et al. Science 2009, there is a link made regarding climate change causing major megafaunal extinction. Pollen can be used as a proxy for climate change as it is extremely resistent to decay. This study uses a fungus called 'Sporomiella' and found that they were scarce in the the Holocene era and coincided roughly with the Bolling Allerod period. This means that the decline in megafaunal could have been caused by the warming of the earth. An article in The Guardian raises awareness of how 'Scientists have 'limited knowledge' of how climate change causes extinction'. 
In fact, its interesting that recent studies including, Hopper et al. 2012, reveals that biodiversity loss is a major driver of eco system change. However, before we must identify what actually causes extinction to resolve this never ending debate!

Philosophy and Climate Change

It's interesting to see that philosophers are also concerned with climate change and the ethics behind it. Philosopher and economist, John Broome, raises his concerns about the uncertainty of the climate change effects in the future and the need for Governments to take action. He rules away the idea of utility maximisation, taken from welfare economics, as a means of deciding whether actions should be taken. In his book, 'Counting the Cost of Global Warming' (1992), he argues, "

I do not think the decision-making process can be simply a matter of calculating expected utilities and then going ahead. The problem is too big for that, and the uncertainties - particularly the historical uncertainties - too extreme." Typically, welfare economics uses a cost benefit analysis when deciding whether to pursue policy options, but there lies a lot of difficulty when placing a value on the cost of climate change.

 

As a philosopher, Broome states the idea of justice to future generations of correcting pollution because there is a mutual advantage. In fact, I agree completely with his ideology and Governments should work together to correct this for the whole of society. Another idea of Philosophy which comes into pollution is incommensurability. This means that two ideas can not be compared to one another. For example, protecting nature and human welfare are incommensurable because they are both not better than one another and also not equal to each other, so in this situtation is it not a duty to act in a way which is correct and ethical? 

China's Carbon Emissions and Urbanisation

China is the world's biggest greenhouse gas emitter

In 1980, less than a fifth of China's population  lived in cities. New data from the National Bureau of Statistics show that out of China's 1.35 billion people, 51.3% lived in urban areas by the end of 2011. Nobel prize winner, Sir William Arthur Lewis, develops a link between urbanisation and economic development. He says that as economies develop they move from rural areas to urban areas to acquire higher paid jobs in industries. This can explain the sudden boom in China's urbanisation, which has required a large amount of deforestation adding to the greenhouse effect. At the same time, China's industrial emissions of CO₂ have grown phenomenally since 1950, when China stood tenth among nations based on annual fossil-fuel CO₂ emissions. 1950 is also the proposed time of The Great Acceleration! An interesting journal by Simon J Price claims that land use change by humans has, " modified the landscape through excavation of rock and soil, generation of waste and creation of artificial ground." The major land use change is urbanisation and development of industry. This change has been taking place well before even the Holocene, but its been most significant after the Industial revolution, which is due to exploitation. Data from US Environmental Protection Agency shows that  economies, such as, US, Europe, Japan (developed) and China (developing), contribute the most globally. Can we create a link between economic development and greenhouse gas emission? Yes, because development of economies means jobs and houses are needed, which leads to deforestation and building of industries.