Degree Year

2003

Document Type

Thesis

Degree Name

Bachelor of Arts

Department

Economics

Advisor(s)

Hirschel Kasper

Keywords

Greenhouse, Gases, GHG, Climate, Change, World Bank, Global, Government, Industrial management, Environmental policy

Abstract

After years of intense debate, global climate change has finally been acknowledged as a serious threat to global biological, political and economic systems. There is overwhelming evidence that the atmospheric warming observed over the course of the past 50 years, as well as the increasing incidence of extreme weather events and floods, is being caused by the acceleration of the rate in which greenhouse gases (GHGs) produced by the burning of fossil fuels are being released into the atmosphere. The extreme weather and weather-related events associated with climate change, such as landslides and flooding, totaled roughly $40 billion in the 1990s. It is not surprising, then, that the governments of many developed and developing nations, as well as intergovernmental bodies like the United Nations and the World Bank, have adopted a variety of measures to reduce GHG emissions and mitigate the potential impacts of climatic change. The government of Slovakia sold credits for 200,000 metric tons of carbon dioxide equivalents to a Japanese trading house at an undisclosed price on December 6, 2002, making history by signing the first deal to be officially credited within the international Kyoto Protocol, a global agreement to reduce the GHG emissions of participating countries seven percent relative to their 1990 levels by 2010. Nor is it surprising that environmental interest groups and active citizens in the United States and elsewhere are pressing their elected leaders to pass stricter regulations on the emission of GHGs.

What is somewhat baffling, though, is the number of privately owned companies that have taken it upon themselves to voluntarily reduce GHG emissions as a way to address climate change in recent years. Dozens of companies are voluntarily participating in the design and implementation of GHG emission reductions programs. For example, the International Emissions Trading Association (IETA) lists 47 international members including Gaz de France, British Petroleum, Shell International Limited, Norsk Hydro and Unocal. Private for-profit groups like the Chicago Climate Exchange (CCX), a pilot emissions reduction credit (ERC) trading program, and C02e.com, Cantor Fitzgerald's online emission trading market, are forming partnerships with private companies to devise strategies for reducing emissions in the quickest and most cost-effective manner. Government programs like the Greenhouse Gas Emissions Reduction Trading Pilot (GERT) in Canada and other programs in France and the United Kingdom are forming similar partnerships. Nonprofit environmental groups like Environmental Defense and the World Wildlife Fund have their own, similar pilot projects. Most of these voluntary programs are centered around emissions trading, a policy tool commonly utilized for its cost effectiveness and ability to yield abatement results.

Included in

Economics Commons

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