1.The issue to do with climate change has become a factor of discussion worldwide. Following the issue, Kenneth J. Arrow an economist wrote an article by pointing out that actions should be taken concerning the uncertainties concerning the Futurity and risk discounting. There is the issue of the accumulation of the toxic gases from the industries that will be discussed in this document to enlighten the readers on the climatic change. Economists are made to think that the mediation of the implications is done through interactive systems having positive and negative feedbacks. One of the assumptions laid is that additional cost for the prevention of the accumulation of the CO2 will not exceed one percent of the Gross National Product (GNP) in every year forever. The second assumption made in the article is that any component of the discount rate attributable is the declining marginal utility and is given a value of 2.1(Jones & solem, 2015).
2.The writer suggests that we are better off to act towards the reduction of the emission than to suffer and risk the outcomes of failing to meet this challenge. This comes about as a result of some given impacts in the climate change among them being;
Increase in temperature by at least two degrees Celsius which comes about with a concentration of 550 ppm. The world is heating, and the effects are seen more so in the Polar Regions. The signs of the effects of global warming appear in our daily lives. The heat has lead to the melting of the glaciers, and the sea ice which has led to a shift in the patterns of precipitation and the animals have been set on the move. The melting of ice in the northern poles has occurred in areas like where we have mountain glaciers, the ice sheets which cover the Western Antarctica and Greenland and the ice of the Arctic sea. Most of the species have also been impacted upon by the change in temperatures. For instance, research shows that there has been a decline in the number of penguins that live in Antarctica whereby they reduced from 31,700 to 10,260 in 28 years. In the last century, the sea level was noted to be rising at a faster rate. There has been a notable movement of some butterflies and the alpine plants to the higher cooler areas. Rain and snowfall (forms of precipitation) have increased in the whole globe (Jones & solem, 2015).
Apart from the above, other impacts are expected to take place in this century. The sea levels are expected to go up from in between 18 to 59 centimeters as we near the end of this century. The hurricanes have a likelihood of becoming stronger while the floods and droughts will be beheld. There will be limited fresh water ready in that, given that the ice cap of Quelccaya in Peru goes on melting at that rate then by 2100 there will be no fresh water, and this will make thousands of people who rely on this water for electricity and drinking hopeless. The disease is expected to spread very fast like Malaria which is mosquito borne and there will be a tremendous change in the human species whereby most of them will move to the north while others will find it hard to move and become extinct(Jones & solem, 2015). There is a high need to contain and decrease the green house emissions to give a good chance to the farmers and fishers to give food to the world. The specialists in Science warned that there are still five more years to avoid the harmful climate change that is supposed to be generated by the increase in the world temperature by 2 degrees Celsius and above the technical levels. Given that there is an excess of this kind of guardrail temperature, Australia will be the most affected. To evade this hitting of guardrail, there should be a decrease in the annual global emissions annually. For instance, the climate change projections show that there s a likelihood of an increase in the frequency and the magnitude of the wildfires, rise to the level of severity of the cyclones, decrease in the level of rainfall, increase in the incidence of drought and rise in the extreme temperatures (Edenhofer et al, .2012).
The greenhouse gases prevent the globe from getting rid of as much of this given heat since it would otherwise back into space. The earth could be considerably a better place with the natural occurrence of the greenhouses. The earth would also be hospitable to the existence of modern man .however, the addition of the greenhouse gases to the store s going up increasingly because of the human activities(Jones & solem, 2015).The long time summers are considerably becoming shorter and the droughts being longer and drier. The latter is due to the growing store of the greenhouse gases. The oceans have become more acidic and the sea levels have been noted to be considerably rising as the glaciers melt and the water that is warmer expands. In regions like Australia, the days of fire danger are becoming more evident in most of the parts of that country with an increase of intensity of floods and cyclones. There have been changes n the breeding migration sequence of birds and other creatures like fish and plant species have been spreading into given latitudes that were beforehand cold for them(Thomas, 2014).
There is need to act faster because if the global temperature goes up between 2 to 2.4 degrees Celsius, then the concentration of co2 should not be allowed to exceed between 445 and 490 parts per million(ppm).In the world, communities are implementing strategies to do their part with the aim of effecting this change. The people of Australia should take a leading part in the playing of demonstration of how the latter can be done in a society which is known for having a high level per capita of emitting of carbon. However, there is the need for the more support since there is a short duration of time (Edenhofer et al, .2012).
Solutions to global warming effects
Reducing emissions
There is need to reduce the heat trapping emissions that are put in the atmosphere. Fortunately, there is the technological knowhow and the practical bit to the solutions of the problem. There is need to take action in reducing the personal emission of carbon. There is however need to call upon our leaders to aid in the given set of solution.
Expansion of renewable sources of energy and the transformation of energy systems to one that is cleaner and not dependent on coal and fossil fuels.Increment in the efficiency of vehicle fuel and aid of the solutions that lead to the reduction of the oil use. There should be limits on the quantity of the polluters that are permitted to emit. Encouraging investors to build a cleaner energy economy that educe global warming (Houghton, 2014).
3.Ρ is used to represent the social rate of the preference of time. It gives an allowance to the future because it is just the future given that the future generations we better off or not than the present generation.
η is used to the elasticity given to the social weight which featured in the change in consumption. It shows that as consumption continues to go up, the marginal units of consumption add very little value. The equation δ = ρ + gη shows the futurity in that it relates the future outcomes of the climate change with the existing climate. It tells us the rate at which future outcomes and future consumption be discounted for in the present (Stocker, 2014).
The other factor is g and it refers to the projected growth rate of the consumption.
Any kind of uncertainty regarding g may lower the value of δ. The social value that is related to δ goes down with the continued growth. This is true because as we consume more and more of a value, the level of marginal utility goes down and down till finally we quench or else get fully satisfied. A persons consumption does not affect o is not affected by another person’s consumption and the consumption does not deplete whatever good that is been consumed. Hence the consumption of the kind of good in this question will have lesser and lesser value to the community and will finally not contribute to the well being of the people no their social capital. There are various damages that are both market and non market. These can be termed or seen as the mitigation of the greenhouse gases. There is an expected loss of about 20% if at all we move y this degree of uncertainty. There will be also a loss in the growth rate by a given amount of approximately 20% if we follow the figures that were given y the writer of the article.
On the other hand, following the tables given in the article, the cost of stabilization will increase from 3.4% to an alarming 3.9% of the total Gross National Product (GNP) (Edenhofer et al, .2012).
4.The social welfare discount rate refers to the rate that is used to translate a marginal change in consumption at some future date into marginal change in the consumption duration at time zero. There are two distinct reasons that account for discounting: time preference rate and difference I the marginal utility of consumption in between the two duration of time. The marginal utility of consumption goes down as consumption goes up and hence the second reasoning will therefore be depended on the rate at which consumption is going up or down over time. The δ converts the future consumption to a level of current consumption which has the same value in terms of the social well being of the society. The δ is positive to give a reflection of the discounting future utility which is indicated by ρ and the decline in the consumption and marginal contribution to the social welfare which is indicated by η (Jones & solem, 2015).
Ethical considerations are primary to the options of the values in ρ and η. The performance of the economy is highly implied by the value of assumed g. The most important determiners of the social welfare are the welfare function ρ and the utility function η. When one chooses η, Then he has chosen the empirical stand since this indicates the extent to which the future the increase in the consumption leads to a higher persons well being. The optimal saving rates has a negative relation with η.in certain times, combinations of η and ρ are not possible to justify because they need high rates of saving in any state for them to remain indefensible. Small discounts in the carbon case in our question will lead to the Australian people being faced with very big differences in the values that are discounted and attached to the coming far future (Walther & Bairlein, 2012).
5. Given that US withdrew the from the Paris Climate Accord, the rate of carbon emission will go high in America and bear in mind that America produces an approximate of 25% of the carbon released into the atmosphere; this will have a very touching impact to many parts of the world. The withdrawal of America can be explained by the use of the consumption discount rate and the social rate of time preference. There will be increased consumption in America but the consumption discount rate in Australia will go down since the goods consumed will have less social value. The analogous feature of private utility will have a marginalized form of diminishing. There is always a requirement to keep the level of CO2 concentration in the air at a given bound so that it does not exceed that level. This kind of policies are very crucial especially for the countries that emit much carbon (11) oxide and carbon 1V) oxide in the air. These policies are put into practice under the consideration of future benefits (Thomas, 2014).
Given that the US does not observe the policy of mitigating carbon emission in the atmosphere, arguments come up, but there are reasons too that can make us not to care too much about the future outcomes. The effects of the change in climate are felt globally, and they are directly known to affect the climate patterns. The effects are many and range from the melting of the ice in the polar parts of the globe to the rising of sea levels, the collapsing in the marine ecosystems to an increase in the severity in the water systems in most parts of the world, changing the patterns of weather which are accompanied by more occurring and violent climatic happenings of hurricanes, floods, and droughts to the spread of diseases and pathogens. According to the latest reports released by the world health organization, more than one hundred and forty thousand people are dying every year as a result of the change in the climatic patterns and the areas that are most affected include Africa and Asia (Edenhofer et al,.2012).The policies made by the national governments in Paris seem to have a possibility of making some progress, then it calls for every state to follow up to the latter the policies that will see progress in climate change. However, the withdrawal of US from the Paris agreement showed that some big percentage of emissions will still be coming from America. The pulling out of America from the environmental organization and its policies tells out that there will be increased emission of CO2 and also increased production (increased production leads to economic growth) mostly during the recession period. The earth is also bound to warm significantly .there has been a continuous rise in temperature over time to about 1°C.the rate at which temperatures increase has been estimated to be 0.25°C per decade by the year 2020.The Arctic and Antarctica have shown the second result in the level of warming. The latter is because there is more absorption of the sun`s energy by the open sea than the ice present. This phenomenon is called decreased albedo (Houghton, 2014).
There will be increased wildfires which are highly associated with global warming. This might easily lead to the evacuation of people in given parts of the world which will be highly affected .this will lead to increase in temperatures in the affected areas faster than that of the whole earth ,premature melting of the snow and the forests will be expected to dry faster than the expected. The occurrence of dry winters will depict less moisture in the land, and the excess heat will lead to an increment in lighting and hence the occurrence of more ravaging wildfires. There will also e loss of the land that is near the ocean area which includes beaches and wetlands. The latter will be caused by the rise in the sea level. Some species of given plants will be lost in the forest area while in other areas there will be disruptions in the supply of water to the towns and cities and also for the agricultural sector. There will be increased costs in the of air conditioning, health damage, and deaths which will be as a result of heat waves and the spread of tropical diseases and droughts which will lead to reduced levels of output (Edenhofer et al,.2012).
However, some parts of the world will also benefit from this condition. There will be an increased agricultural production mostly in the cold climates, and the costs of heating will also go down. The number of deaths caused by the exposure to cold will also go down. The beneficial outcomes will be witnessed mostly in the northern parts of the northern hemisphere including Iceland, Canada and most parts of Siberia (Jones & solem, 2015).
Conclusion
The issue concerning climate change is known to have embodied issues to do with externalities, universal property resources, public goods, the renewable and non-renewable resources and the discounting of costs and gains given over time. The impacts touch from the economic, technological to the political aspects. The analysis from economics is not sufficient to provide enough response to a problem of this scope, but the economic theory and the policies involved have reliable solutions or get a way to these challenges.
Response to the climate change which is more practical needs a lot of sweeping on the global scale than anything that is so far reached. The economic policies so far achieved and the policy instruments which have the ability to change the patterns the energy utilization, the development of the industrial sector and the distribution of income are very vital to any plan that is aimed at mitigating the climate change. Climate change has already been witnessed, and its outcomes are obvious, and the issues of the consequences will continue being severe as the accumulation of gases takes place, and the costs of the damages continue to rise.
References
Edenhofer, O., Pichs-Madruga, R., Sokona, Y., Seyboth, K., Matschoss, P., Kadner, S., … & von Stechow, C. (2012). IPCC unique account on renewable power sources and climate transformation control
Houghton, J. T. (Ed.). (2014). Climate change2007: physics of climate change: input of working set I to the second assessment account of the Intergovernmental Panel on Climate transformation (Vol. 6). Cambridge University.
Jones, P. D.& Soden, B. (2015). Observations: surface and atmospheric climate change. Climate change, 312-326.
Stocker, T. (Ed.). (2014). Environment resolution 2013: the physical science basis: Working Group I contribution to the Fifth Assessment report of the Intergovernmental Panel on Climate Change. Cambridge University Press.
Thomas, C. D.(2014). Extinction risk from climate change. Nature, 432(4940), 143-158.
Walther, G. R. & Bairlein, F. (2012). Ecological responses to modern climate change. environment, 416(6879), 389-395.
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