Global Warming as an Economic Issue - Essay Example

INTRODUCTION Essentially global warming means that the global average temperature in the oceans and general atmosphere is on the rise. The escalation of the temperatures has been on an upward trend since the beginning of the 19th Century. It is estimated that the global surface mean temperature has had an escalation of estimated 0.8 degrees centigrade. Global warming is a world reality and continues to intrigue the global leaders on how to address this challenge (Karl 2008, 35). Several causes are leveled towards the unequivocal rise of the global temperatures, among them, deforestation, fossil fuels combustion, a widespread rise in the amount of the greenhouse gases among others. Global research projects that if the warming is not adequately addressed the temperatures are estimated to rise by a further 2.9 degrees centigrade by mid-this century. The level of emissions especially among the developed countries is alarming, the paradox remains the lack of goodwill by these countries to pool up efforts and resources in addressing the global warming (Hansen and Lebedeff 2007, 99). The effects of global warming are far and reaching, some of which have been widely experienced across the globe. Despite emphatic efforts by most developing countries on addressing the global warming, the cold shoulder offered by most developed countries remains the greatest drawback to a successful curbing of the menace. What is clearly evident is that global warming is a very sensitive issue; a political issue. The dynamics of world politics dictate the level of the efforts and resources channeled towards addressing global warming. As glaring as it stands out that global warming is a political issue, there are also various economic issues that come into the centre stage of addressing global warming (Karl 2008, 26). Increase of global temperatures is without a shadow of doubt a precursor to so many effects and catastrophes. Global warming is attributed to be the main cause of the rise in the sea levels; this in effect has the patterns of levels of earth’s precipitation altered in a major way. Increase and continued expansion of the deserts especially in the subtropics is also seen as a result of the harmful effects of increased earth’s temperature. Another great effect of rise of global temperatures is the climate pattern change, especially in the Arctic; example is the increased depreciation in the levels of sea-ice, glaciers and permafrost. There has also been ultimately direct connection between global warming and species extinction, droughts, typhoons and hurricanes, agricultural production and shifting regimes in the global temperature. These changes have trickled down to all the continents with global conferences, being called upon again and again to address the menace and the horrific changes in ecosystem that may be experienced (Chichilnisky 2004, 50). The seriousness and intensity of global warming is seen in the effort of the countries to merge and partner in the widely known United Nations framework Convention on Climate Change (UNFCCC). The ultimate goal and sole objective of the convection has remained in the prevention and control of poisonous anthropogenic chemicals which are human inflicted. The countries have effortless channeled their partnership towards cutting short the extent of global warming and also marginally reducing the greenhouse gas emissions. The efforts have however been up-to the challenge of reducing the global temperatures to below the two degrees centigrade. These efforts are steered by the International Energy Agency (IEA) and the United Nations Environment Programme (UNEP) which has its headquarters in Nairobi, Kenya in East Africa. MAJOR CAUSES OF GLOBAL WARMING GREENHOUSE GAS EMISSIONS The greenhouse effect which was first discovered in 1824 by Joseph Fourier refers to the emission and radiation of the infrared in the earth atmosphere. The greenhouse gases associated with the atmosphere warming especially n the lower surfaces include; methane, carbon dioxide, ozone and water vapor. The increased emission of Carbon dioxide and methane is highly associated with the current levels of global warming (Cline 2002, 56). Increased industrial activity has led to the greatest concentration of the greenhouse gases since the 18th Century. Industrial and manufacturing activities especially in the most developed countries where deforestation has taken a greater toll, has resulted in the radiation concentrations of nitrous oxide, CFCs and troposphere ozone. The carbon dioxide levels are not anticipated to drop especially with the continued explosion of the human population, land activities and also the burning of the fossil fuels. Often there is a lack of clear delineation and separation of the twin climate changes of global warming and ozone depletion. Essentially the two are different since ozone depletion referrers to the complete destruction over time of the stratospheric ozone whole global warming refers to the increased troposphere ozone which has resulted in the increased global warming effect. In contract whereas the increase in troposphere ozone results in global temperatures rise, the reduction of the ozone associated depletion stratospheric sphere has a greater cooling effect in the atmosphere (Dasgupta 2006, 87). Particulates and Soot The effect of the particulates is global dimming. Particulates are associated with the volcanic activities whose net effect is the global irradiance of the surface of the earth. The particulates lowers the temperature of the sunlight and reduction of the carbon dioxide emissions, these has the effect of increasing the levels of methane which has the net effect of increasing the global temperatures. The effect of particulates on the carbon dioxide does not at lowers reduce the effects of carbon dioxide which has a lifetime of about a hundred years, it only prolongs the timing. The particulates are associated with the effects of Twomney effect and Albrecht effect which results after condensation of cloud nuclei due to the sulfates (Karl 2008, 28). Atmospheric soot has also have the twin effects like the particulates; that of lowering the solar radiation. This increases due to the increased industrial activity. The effects of atmospheric soot are often evidenced in form of brown clouds that form in the atmosphere. When the brown clouds are finally deposited among the lower surfaces of albedo, the global warming and effects of greenhouse gases increases. The soot accumulation is especially felt among the developing countries, where there is increased deforestation and high levels of industrial activity especially as the countries aim to increase the economic development (Nordhaus 2006, 65). Solar Activity Globally the net effect of solar variations has been associated with the global warming. Solar radiation and solar wind which has been associated with increased solar forcing and greenhouse gases effect is evidenced in the slight warming effect of the temperatures. Solar effect according to the hypothesis proposed and defended by Henrik results when the magnetic effects of the sun deflect the climatic cosmic rays. There is a strong correlation between the cosmic rays deflection and increased escalation of the cloud condensation nuclei. The effects of solar activity are essentially trivial in explanation of the global warming; this is as opposed to the greenhouse effects and particulates as a result of volcanic activities and burning of the fossil fuels (William 2001, 35). NEXUS BETWEEN GLOBAL WARMING AND ECONOMICS In humans’ quest to realize better working conditions and improved economic growth through trade, technology and equity, there have been unprecedented changes in the climate change and effects on the environment. The result is the accumulation of the carbon-dioxide and methane which has in effect resulted in the increased global temperatures (Peterson 2007, 89). There remains unequivocal and unambiguous relation between economic policy and global warming. The scant research carried out on the externality of economic on global warming has shown that policies applied to curb the greater effects of the greenhouse effects has had detrimental effects through economic policies such as; taxation, economic and government regulation, tradable emission permits, measures arrived through compensation avenues and also an unrivalled consumption of economic goods and services. The greater challenge however lies in the fact that there has been unprimed economic externality on the global warming effects. In analyzing the economic relation of the global warming, it is imperative to take into account the tradeoff the current generation and the future generations. The harmful effects of the current trends will without a shadow of doubt have an effect on the next generations unless the proper methods and policies are put into place to address the issues of global warming. The key component in measuring this trend is a careful analysis of the real GDP of the current trends and the expected and projected GDP of the future growth of the economies. To realize the mitigation of harmful effects of poisonous emissions can only be realizable upon proper investment of the right investment of the resources. If proper consumption of the current resources is not put into check, this will mean the benefits in the current generations will be the detriments of the future generations (Stern 2006, 56). ECONOMIC ANALYTICS OF GLOBAL WARMING The analysis of economics involved in the global warming involving an analysis of four elements. The four are the present generation consumption represented as C, the capital stock conventionally employed by the current generation represented as K, the future generations consumption represented by symbol F, and the capital stock investment mitigation of the current generation represented E. the interplay and dynamics of these four elements affect the global warming and economics interrelation (William 2001, 30). The first assumption in making any objective calculation between the global warming and economics is that there exists a tradeoffs between the consumption of the current generation and the future generation; thus the C and F are essentially the functions of both E and K. the decline of the current generation can only be increased only if there is only an increase of K and E. These occurs when the real resources are divulged from the consumption to the climatologically and convectional investments. On the other hand if there is going to be greater consumption of the future generation, then it means that there in going to be increase of E and K because there is less conventional methods of global harm and thus a greater good and benefit to the future generations (Mendelsohn et al. 2004, 45). To realize the optimal benefits of future generation requires a greater investment in climatological investments E and an equal diversion of all the real resources from the conventional methods K. such kind of diversion due to the marginal cost of increasing E to the detriment of K would mean that C which is the current consumption will essentially remains constant. The effect of this is an increase of consumption of the future generations. When the E convectional investment reaches what is referred as a marginal cost in terms of K will result in lack of trade off between the C and F which are the consumption in both the current and future generation respectively (Cline 2002, 29). INTERGENERATIONAL EQUITY AND TIME-DISCOUNTING The generational discrepancies results from the global warming externalities and in effect result in intergenerational equity. If there is a differential investment of the conventional methods and climatological investments to a level where the current generation receives greater benefits then the future generations will be affected in terms of the returns and benefits. If the externality of global warming remains unchanged and uncorrected, then future generations stand to suffer as opposed to the current generation. Greater incentives are only seen to result when the current generation puts a higher value and premium on the future generations. These externalities are evidentially correctable if there is a check and balance in the current generation consumption and investment in capital goods. Mitigation effects of the current generation stand out as the bulwark of the calculations regarding the intergenerational equities and time discounting. The mitigation redress assists the economists in analyzing the effects of global warming by looking into intertemporal discount rate and intergenerational costs (Karl 2008, 15). Intergenerational costs tradeoffs are only calculatable if there is a detailed analysis of the constraint put by convectional investments conventionally employed measured against the resource costs and consumptions of the current generation. In calculating such a correlation one of the major presumption that is taken into account is that the current conventional methods and climatological investment that are injected in the economy. The biases resulting in such a set up is that we put a constraint on the current generation since the mitigation effects are financed by real resources of the current generations (Stern 2006, 67). The intergenerational equity is however seen as a result of mitigating policy of the current generations. The profit accrual of having a sound investment policy means that the current generation will get unprecedented overcompensation. This level of overcompensation is particularly desirable since global warming as analyzed is not essentially only an economic problem but greatly a political issue. When the politics take a centre stage, this essentially means that such overcompensation becomes a political card of supporting the mitigating effects of addressing the gas emissions (Dasgupta 2006, 87). MITIGATION STRATEGIES The challenges of addressing the mitigation policies and effects lies in the uncertainties of the current benefits and costs that are injected by the current generation as compared to the future generation. The estimates remain the only tool through which the capping of the greenhouse emission effects can be analyzed. The policy makers’ trend on a tight rope in making the estimation of how much the future generations will and are likely to pay for the benefits accumulated through the current generation mitigation strategies in reducing the global warming. The controversy lies over the blurred and obscure levels and extent that the future generations are likely to pay. What remains not in issue is that the benefits will both be enjoyed by the current and future generations if the necessary measures of capping the gas emissions are embraced. The magnitude of willingness is definitely a complex issue in getting the trade offs. The approximation of the extent the current generations are likely to invest in both convectional and climatologically, remain a headache to the policy makers (Peterson 2007, 35). It is clear to all policy makers that the future generations will have to bear the errors of over or under investment portfolio made by the current generation in addressing global warming through the mitigating strategies. In as much as the costs trickle down to the future generation, so are the benefits. Real resources need to be channeled towards direct convectional investment, these can be sourced from loans and borrowing. Borrowing helps to curb overconsumption by the current generation. Borrowing apart from directly realizing mitigation strategies also crowd the marginal convectional investment by the raising of the interest rates. If proper strategies are laid down in mitigating the harmful effect of global warming, this means that climatological investment will result in greater benefits to the future generations (Karl 2008, 69). CLIMATOLOGICAL INVESTMENT FINANCING One of the most intriguing issues that the policy makers have to make is how direct financing can be realized without altering the current consumption of the current generation. The best way to address the economic analysis of mitigation is by putting constraints on investment rather that consumption. The mitigation put into place is seen to cut across three generations; the current generation, future generation and the intermediate generation. Perhaps the benefits of any climatological investment are least felt by the intermediate generation. The current generation ought to invest more in the convectional capital, in so doing then the benefits are likely to be available to both the current and future generation (Stern 2006, 76). The current economic theory which seems to dictate the economic policies is the ‘lump-sum’ transfers. These essentially mean checking the effects of production externalities by addressing the issue of compensation of the current generation. Increase in the carbon intensive energy would reward and compensate the energy users. Most of the public revenues in the coffers seems to be channeled into health, education and raising the living standards of the citizenly. The carbon intensive energy prices ought to be hiked by a correspondent increase in prices got channeled to public expenditure. The backup system will thus be to reduce the extent of revenues acquired through carbon taxes and expenditure offsets, the shortfall of the revenues ought to be acquired through borrowing (Williams 2001, 99). Enough resources also need to be applied in the traditional crowd out methods, which incorporate the increase of interest rates on convectional investment. If the vantage point and focus can be shifted from the current expenditure on public finances, to the revenues and benefits likely to be accrued from sound climatological investment, then there would be goodwill from all quarters on the need to get greater benefits of mitigation of global warming. Resources also need to be channeled too to the alternative energy technologies and a diversion from the conventional methods of carbon intensive methods (Chichilnisky 2004, 35). POLITICAL RESISTANCE TO ECONOMIC POLICIES Overtime the pundits and politicians of the globe have needed more that convectional reminders and persuasion to embrace the mitigation effects of global warming. The political goodwill is essentially one of the major stumbling blocks of realizing the funds necessary for realizing the climatological investment. The major resistance is across both the developed and developing countries. Whereas the developed countries see the climatological investment in realizing the mitigation as a burden the developing countries see the focus as off-point. Mitigation is seen as a burden in considering the level of the issues that the developing countries are grappling with, from poor governance and an over suffocating economies. Universally the premise upon which mitigation of global warming is pegged seems to be neglected and the focus shifted from the main issues to lesser issues of ecological determination (Hansen and Lebedeff 2007, 67). The political cronies are under the skeptical perspective that the kind of resources required to address the effects of global warming including, raising global temperatures, reduction of glaciers and unpredictable climate change, are over estimated. There is also the lack of guarantee that such kind of resources investment will benefit the future generations. Historically the level of resistance between scientists and politicians has been a running through thread. The political pundits do not see the justification of getting the pressure being piled on the current generation for the benefits of abstract future generations. Some even argue that, the future generation may be even better off if the necessary measures of mitigation of global warming are not addressed (Stern 2006, 45). The political cronies who sit at the high tables of economic resources distribution of public finances, see channeling climatological investment as a loss of focus. Such kind of investment is seen as a hurdle to realizing the economic development. It is a paradox that the same politicians are in the forefront of discussing the effects of global warming, but lack the goodwill to release the funds necessary. In as much as the effects of global warming are glaring at our view, they have not served as a catalyst of activity but a comfort zone of inactivity. Political dynamics operate under illusions. They fail to see the future by overly taking into perspective the current situation. The politicians are also under the guise that the efforts of a particular region to invest in mitigation will be felt by those who fail to participate. In as much as the benefits of mitigating global warming are not simultaneously realizable with investment, future generations stand to gain and for that they will be forever grateful. This is the disconnection that fails to dawn on the so called politicians (Nordhaus 2006, 55). CONCLUSION Globally the efforts of achieving a capping of the greenhouse gases emissions have been evident through ratification of international instruments like Kyoto Protocol and the Copenhagen Accord. What remains the challenge to realizing the objectives set out in this carefully drafted instrument is political goodwill. Developed countries especially the US seems to continually hold onto their interests as opposed to the global welfare. Being a superpower its will always carry the day through veto power. The whole world however need to realize that the effects of global warming are more harmful that our guarded trivial interests. The environment is greater than all of us. The efforts need to be channeled towards realizing greater growth, curbing global temperatures and protecting the future generations rather than disintegrating the efforts of conservation. Incentives and resources are very necessary in realizing a better world to live in. REFERENCES Chichilnisky, Graciela. 2004. North-South trade and the global environment. American Economic Review. Cline, William. 2002. The economics of global warming. Washington, DC: Institute of International Economics. Dasgupta, Partha. 2006. Comments on the Stern Review’s Economics of Climate Change. Unpublished draft. Cambridge University. Mendelsohn, R., Nordhaus, W. D. and Shaw, D. 2004. The impact of global warming on agriculture: a Ricardian analysis. American Economic Review. Nordhaus, William D. 2006. The “Stern Review” on the Economics of Climate Change”. Working Paper 12741. . William, Nordhaus. Global Warming Economics, Science, 294, no. 5545 (2001) :28. Stern, Nicholas. 2006. The Stern Review of the Economics of Climate Change. London: Oxford University Press. Hansen, J and Lebedeff, S. 2007. Global Trends of measured surface temperature. J Geophys Res. Karl, T.R. 2008. “Regional Trends and Variations of Temperature and Precipitation” in the Regional Impacts of Climate Change. IPCC WGII: Cambridge University Press. Peterson, T.C. 2007. An Overview of the Global Historical Climatology Network Temperature Database Bull. Amer Meteor Soc. Read More