Introduction

Pollution impacts people and the environment on a large scale. Pollution affects everyone through one way or another, the air you breathe could not be as clean, the water you swim in can contain heavy metals. The way pollution affects people and environments is different in different parts of the world, for example, underdeveloped and developed countries. To try and hold companies accountable for pollution there are ways to implement taxes, carbon permits to try and prevent the majority of pollution. Environmental regulation standards help but so much more could be done. The Intergovernmental Panel on Climate Change (IPCC) released a study, with 76% of the World’s greenhouse gases are emissions of carbon dioxide, and of that 76%, 68% of emissions comes from energy related sources (Financing Renewable energy projects in Major Markets). According to the U.S Energy Information Administration CO2 emissions are predicted to rise significantly, by about 46%. In the world today, only 19.1% of total global energy is coming from renewable sources (Financing Renewable), this means that the market could have the potential to exponentially rise in popularity in the next couple years. With global powers joining together to achieve this technological feat, we are closer than ever to a cleaner, greener, less polluted earth. Even though the demand for renewable energy is increasing, in 2017 the global investments in renewable energy and energy efficiency has decreased by 3% (Hossain, 2018). Mainly due to fact it is hard to get over the upfront costs of incorporating these types of technologies. As global emissions continually rise, Earth will be facing one of its hardest problems to solve.

6.1 – The Distribution of Environmental Damages

There are many factors that play into a prosperous economy. Growing industrialization and innovation aim to aid the growth of economies, whether it be building new infrastructure, or inventing new technologies, the common goal is to reach a point of social and economic prosperity. Over the past several decades, many countries worldwide have experienced exponential growth. In the presence of economic growth, both local and national economies will face a range of external effects from all factors involved in the economy. A growing problem that we face in the presence of economic growth, is growing negative externalities. Environmental externalities refer to the economic concept of uncompensated environmental effects of production and consumption that affect consumer utility and enterprise cost outside the market mechanism (stat.oecd.org). There can be both positive and negative externalities, but when talking about environmental degradation the externalities are almost always negative. Negative externalities are costly to governments worldwide, and therefore warrant further analysis. We will examine the distribution of externalities among different regions, the exploration of internal and external factors that can lead to this uneven distribution, such as socioeconomic background, population density, and see how these factors affect policy and regulatory efficiency in different societies.

First, we look at the distribution of consumption of negative environmental externalities. It is important to determine a baseline of different regional socioeconomic backgrounds, population density, and population heterogeneity before analyzing regional environmental regulation, and policy. Hsiang et. al (2019) focuses on attaining a better understanding of the relationship between welfare distribution and environmental degradation distribution. The damage function drawn up by Hsiang et. al. (2019) uses several factors to help analyze welfare, these being: level of exposure to the environmental condition, socioeconomic attributes that may influence how exposure affects measures of economic well-being, and the level of vulnerability. Hsiang, et. al. (2019) defines vulnerability as the rate at which exposure to an environmental condition generates harm given some initial social and environmental conditions.

These terms of measure apply to three very common types of pollution, air pollution, forests and associated ecosystem services, and climate change. Starting with air pollution, there are several findings. First, due to varying and ambiguous results in previous air pollution studies, Hsiang, et. al. (2019) look specifically at NO2 air pollution. NO2 is a highly reactive gas that can cause an array of negative health and environmental externalities, for example, NO2 can cause severe respiratory problems, with prolonged exposure. With regards to the negative environmental externalities, high levels of NO2 in the atmosphere can cause acid rain (EPA, 2020). It is found that with higher population density there is a higher level of NO2 pollution per household. Hsiang, et. al. (2019) determines that higher-income households consume higher levels of NO2 pollutants, because urban areas with higher population density, also have higher per capita incomes. Further investigation by Hsiang, et. al. (2019), through data at the MSA (Multi-System Atrophy), shows a large variation in household consumption of NO2 in metropolitan areas. It is found that there is a U-shaped curve showing that exposure levels of high-income households and low-income households are relatively similar, and those of middle-income households consume far less NO2 exposure. This conclusion can be attributed to the fact that some of the lowest and highest income households are located in Metropolitan areas with high population density, says Hsiang, et. al. (2019).

Hsiang, et. al. (2019) then moves on to the analysis of Forests and associated Ecosystem Services. Before any conclusions were drawn, it is important to note that there is insufficient data available on exposure to forest coverage and accessible ecosystem services linked to demographic characteristics, which can potentially skew any results drawn from this section of the study. Hsiang finds that there is no real difference in forest coverage and ecosystem service exposure between different socioeconomic or demographic groups. This being said it is found that there is a positive relationship between income and afforestation, and other protective policies.

The last environmental externality analyzed by Hsiang is climate change. It is identified that climate conditions are a function of geography endowment and not a result of the societal function. “However, because populations might select into different climates based on their preferences (Acemoglu, et. al.  2018), it is challenging to measure the causal effects of natural endowments directly.” Hsiang, et. al. (2019). This is important to note before any further analysis of climate endowments, their relationship to socio-economic impact, and their impact on economic success. There is sufficient evidence that shows regions, and countries with warm, tropical environments, experience more frequent and severe climate changes, these regions also on average tend to be of the poorest regions in the world. This is found to be true for the present analysis, and for projected future analysis Hsiang, et. al. (2019), so there is a correlation that can be drawn between poor regions experiencing the brunt of climate change.  There are exceptions to this conclusion, for example in the United States, in the more tropical regions of the country, such as Florida and California have thriving economies. Another exception to this conclusion is Australia’s exposure to heavy climate change, despite being as wealthy as it is.

Hsiang, et. al. (2019) conclude their study with 2 important findings and statements for future study. The first conclusion drawn is that in some cases the poor do disproportionately bear the burden of environmental damages, but this is not true for all areas of environmental study.  It is found in this study that poorer populations are disproportionately exposed to air pollution, and deforestation, but not to larger amounts of climate change. The second conclusion drawn is that in order to appropriately construct regulation and policies across different socioeconomic and demographic regions it is crucial to understand the heterogeneity within that population and what inherent disparities exist because of the heterogeneity. It is suggested that the priority of future study should involve the systematic isolation and empirical testing of any hypothesized reasoning. Hsiang, et. al. (2019)

6.2 – Environmental Regulation, and Resource Misallocation

Now that a baseline of factors that influence environmental externalities and welfare among different socioeconomic and demographic backgrounds has been established, we will look at a study that evaluates policy, resource allocation, and environmental efficiency. Historically there has been great controversy on the most efficient way to regulate environmental externalities. There are two main types of environmental standards in which all environmental regulations fall under: emissions standards and ambient standards. Emissions standards set a limit on the quantity of pollution each firm can emit as a whole, while ambient standards set a maximum allowable level of pollution emitted on specific pollutants. Under these two standards, there are many specific regulatory methods that are chosen to best fit the demographics of a given area. Along with the decision of what type of environmental regulation to choose, there are also issues of choosing the appropriate level of pollution. There is an ongoing battle between firms and regulatory authorities to balance the firm’s optimal level of pollution and to set protective environmental policies. The “optimal” level of pollution, shown by Figure 1.0, is the point at which the marginal costs of abating pollution are equal to the marginal damage cost of the pollution, in other words, the optimal level is where the marginal cost of cleaning up pollution is equal to the marginal cost caused by the damages.

Figure 1.0: Optimal Pollution Level.

We will take a look into China’s environmental struggles, allocative efficiency, and policy choices to better understand the hardships that come with balancing a prosperous economy, while minimizing environmental degradation. China has faced tremendous amounts of negative environmental externalities in the last four decades. They have seen exponential rates of pollution since its economy took off, holding about one-fourth of the words pollution (Wang, 2021). Recently in attempts to lower pollution levels, and use its resources more efficiently, China has shifted from an emissions control standard to a total quantity control standard (Wang et al. 2021). This section focuses on influencers of ecological efficiencies, from the standpoint of environmental barriers, and resource misallocation according to the specific demographics of each region (Wang et. al., 2021).

Allocative efficiency is crucial to an efficient market. Dollar and Wei (2007), found that GDP could rise five percent, solely if resources were allocated more efficiently. China’s shift from emissions control, to total quantity control, has created the problem of allocative inefficiency, specifically the problem of human capital inefficiency. The shift in standards creates industries with disparities in environmental policies (Wang et. al., 2021). You will see these disparities occur in the state and privately-owned sectors of industry. If a firm is state-owned, they are often sufficiently funded, therefore have little concern of market competition, or risk, as opposed to privately owned firms, who are often far less funded, therefore are more influenced by competition, and in nature more risk-averse (Wang et. al., 2021). This causes inefficiency in the market, because now you have state-owned firms producing at low efficiencies, that are very stable in the market, while there are privately owned firms that are producing at a very efficient level, that are struggling to stay in the market, or even enter it (Jones, 2011). Because of these disparities in productivity in human capital, resources in state-owned firms are not efficiently used, while privately owned firms are using their allocated resources efficiently. This causes the misallocation of resources in the market.

The purpose of an environmental standard is to encourage production, while controlling pollution, especially of firms who have higher levels of pollution. Market decisions with regards to environmental policies, always come back to try and produce at this optimal level of pollution. Firms want to contribute to the growth of the economy, which creates many positive externalities, one example being lower unemployment rates. In many cases we see governments wanting to protect firms that produce these socially beneficial externalities, even if it means subsiding the wellbeing of the environment. It’s often found that firms that are the largest contributors to local GDP are the firms that have the highest levels of pollution (Jia and Ni, 2017). Governments are often hesitant to penalize firms that are responsible for substantial amounts of employment, taxes, and GDP (Jia and Ni, 2012),  but in doing so this further exacerbates negative environmental externalities, allocative efficiencies, and local disparities.

Wang et. al., (2021) used a regression model to find the optimal level of regulation strength to reduce misallocation. In doing so they were able to find that 1.13 is the optimal relative environmental regulation strength, and in finding this optimal level, they concluded several things. First, they find that in regards to neighboring regions, a ratio of one region’s regulation strength surpasses 1.13, an increase in strength of environmental regulation will lead to an increase of resource misallocation. If the ratio is lower than 1.13, an increase in strength of environmental regulation will lead to a decrease in resource misallocation. Second, they find that a region’s decision on “appropriate” environmental regulation is largely dependent on neighboring regions’ policy decisions. Third, that the found ratio of 1.13 is only of average significance, therefore the more important focus by governments with regards to environmental regulation should be based upon historical and realistic conditions. Lastly, based upon the three previous findings, that regional protective policies should be abolished, because of how much influence inter-regional policies have on allocative efficiency.

6.3 – Innovation, Economic growth, and the Environment

Concern for environmental protection has become more prevalent in many countries worldwide. This growing concern can be attributed to the decrease in environmental benefits that people receive, along with growing pollution-related health problems (Chen et. al. 2010). Growing awareness and concern for the issue has led to different regulations, such as carbon and energy taxes, it has also led to new innovations. Environmental regulations play a large role in green innovations (Horbach, 2008). Green innovations according to Chen, Lai et al. (2006), is hardware or software innovation that relates to green products or processes, including the innovation in technologies that are involved in energy-saving, pollution-prevention, waste recycling, green product designs, or corporate environmental management. Green innovations are key to producing in accordance with environmental regulation. Green innovations are causing a systemic change in industrial production, and renewal (Corrocher & Cusmano, 2014; Metcalf, 2011; Soo, 2008). We will now look at the relationship between technological innovation, and sustainable development, using data from 31 regions in China (Li, Li, & Li, 2019).

When analyzing the relationship between technological innovations, and sustainability, we look at 3 variables: the role of environmental governance, efficiency of science and technological services, and economic development:

1. Environmental governance is one of the three core variables (Li, Li, & Li, 2019). The role of environmental governance is crucial to the success of green innovations. Environmental governance is the advocation for sustainability. This role by the government is so crucial because they are responsible for policy implementation. Along with policy implementation, they are responsible for a large portion of the regional population’s perception of environmental externalities.
2. Science and technological services are the second core variable (Li, Li, & Li, 2019). Innovation in science and technology is the driving factor for green innovations. Levels of science, technology, and innovation vary regionally, but these are not mutually exclusive goods (Li, Li, & Li, 2019). Although there are disparities in domestic production regionally, the spillover effect allows for positive external effects (Li, Li, & Li, 2019). They measure efficiency level using many variables, some including: employment in the science and technology industry, and investment in fixed assets.
3. The level of economic development by region is the third core variable (Li, Li, & Li, 2019). They use per capita GDP to measure economic development. Higher-income households tend to value the environment more than low income because they are more able to consume benefits from the environment. The higher valuation of the environment in high-income regions will increase the demand for science and technological services. This will cause the industry to grow both in size, and in quality (Li, Li, & Li, 2019)

The regression model’s used by Li, Li, & Li, (2019), showed several things.

First, it provides us with an efficiency threshold for science and technological services. If a region’s efficiency threshold is below .107, this means their investment in environmental protection is substantially lower than those greater than or equal to the threshold of .107. The data they collected from the 31 different regions in China show that 10 regions have thresholds lower than .107, several of these regions having very high levels of pollution. The data showed that improving the efficiency of science and technological services in the green innovation industry will contribute to better environmental pollution control. Next, they find that if the threshold for science and technological services is below .066 the impact of science and technological services is not significant. This means that regions with low science and technological service thresholds are not adequate in the production of green development, and sustainability development. If a region’s threshold is above .066 then the impact of science and technological services is significant. This means that science and technological services and environmental governance have a positive relationship. Next, they find that when the efficiency of science and technological services is above the threshold of .066 then economic development has a positive, and significant impact on environmental governance.

There is one notable conclusion we can draw from this study. According to Li, Li, & Li, (2019), there are overall low levels of science and technological services, from that we can infer that there are also low levels of economic development and environmental governance in regions with low levels of science and technological services. Because of this conclusion they posed two recommendations for further action. First, the science and technological sector accelerates its production to become more efficient. Second, that economic development should be accelerated, thus increasing per capita GDP.

We now have a better understanding of the relationship between economic growth and environmental degradation. Many factors play a role in the distribution of environmental degradation, such as income and geographic location, as shown by Hsiang, et. al. (2019). These intrinsic factors that aid or deter the distribution of environmental degradation drew a baseline of demographic disparities, that helps us in further analyzing allocative efficiency of policy and regulation. Given our previous knowledge, we were able to have a deeper understanding of Wang et. al., (2021) analysis. We saw a pattern through many of these articles, that income and geographic location were common factors for any environmental and economic analysis. Further justifying this statement that income and geographic location are extremely important, we see throughout the writing of Li, Li, & Li, (2019) that these two factors continue to be prevalent in innovation in the environmental and economic world. We learn through their analysis that environmental governance plays an important role in the green industry’s success and overall attitude towards environmental wellbeing. In saying this the largest contributing factor to effective environmental governance is its funding. Regions with higher incomes tend to have more effective environmental governance. This leads us to the question of how, with constant growing economies worldwide, do we continue to protect our environment.

6.4 Introduction to Global Adaptive Planning

One of the main topics of contention within sustainable development has been the adaptive strategies to climate change by nations. It is important to note that some nations may have several advantages due to their rapid progression in development. In contrast, other nations or regions suffer disadvantages because of a lack of economic progress and scarcity of resources. It is of the understanding of many that underdeveloped nations may bear a large portion of the consequences due to inadequate and disappropriate strategies, therefore exposing their nation’s economic shortcomings.

Climate change will disrupt all economies globally due to the differences in availability in several key resources, for example, fossil fuels, minerals and, freshwater, etc. These differences originate from the loss of biodiversity, depletion of natural resources, loss of the hydration and nutrient cycle, and other detrimental factors that are currently present (Polasky et al., 2019).To understand the disparities between groups of nations, I will describe the established adaptive strategies of wealthier nations and the resources required to execute them, then compare them with the problems faced by underdeveloped regions and the possible adaptive strategies that could be implemented. I will further analyze why these disparities may exist and how individual countries can possibly change the future outlook to create a more sustainable populace and regress these harmful effects.

The rapid progression of the potentially destructive effects of climate change has prompted several countries to give financial notice to adaptive strategies. It was stated that by 2030 there would need to be an investment of at least 171 billion to properly adapt to climate change; a large majority of that investment will be coming from developed countries (Trueck et al.2010). An economically Developed Nation can be described as a country with elevated levels of economic growth along with relatively high income per capita and GDP per capita. Economically advanced countries also experience industrialization of some kind that allows for efficiency in manufacturing and gives rise to proper technological infrastructure(Majaski, 2020). I will introduce two drastically different countries within two different continents that are developed along with their adaptive strategies to climate change. The two countries of interest are China, located in Asia, and the United States of America. Although these two nations can all be characterized as having matured economies, they face several different challenges originating from climate change because of their respective geographies and expenditures. I will begin by evaluating the adaptive planning of both countries. Effective adaptive planning can be described as the implementation by policymakers to mitigate ecological and societal amenabilities and the utilization of empirically based evidence to formulate policies(Adger,et al. 2010).

6.5 Adaptation Strategies in Developed Countries

Geographically China borders Mongolia, India and is west of the north pacific ocean. It is the largest country in Asia, with 1,397,897,720 inhabitants ranking 1st in terms of population. With respect to real GDP, it is the wealthiest country in the global economy and ranks 106th in terms of GDP per capita at $16,117 (US Central Intelligence Agency, 2021).

While 54.7% of the land is used for agriculture,environmentally, China is currently facing air pollution, deforestation, soil erosion and water shortages. Due to urbanization, they threaten the natural habitat of many animal and plant species (US Central Intelligence Agency, 2021).

This country is also prone to infectious diseases transmitted through water, soil and biological contact, this is exacerbated by the climatic disasters as well. For example cholera, dysentery and paratyphoid increased after a flood and the increase in temperature could increase mortality and disease transmission rates. China is a part of several notable environmental international agreements such as Climate Change-Kyoto Protocol, Desertification, Biodiversity, Hazardous Wastes, and Law of the Sea. China is the world’s largest carbon emitter at 11.67 billion mt (US Central Intelligence Agency, 2021).

It is important to study the adaptive strategies that China has undertaken in order to address this factor. Some risk of climate change in China manifests in several sectors. For agriculture if no action is taken crop productivity could decrease by 5-10% (Erda, et al. 2007) . There could be a reduction in Rice, corn and wheat by 37% in 20-50 years. This currently causes scars to the long run security of food. Similarly water dependent agriculture will also take a big hit because of the increase in temperature and decline in precipitation (Erda, et al. 2007). This will have an adverse effect on the production cost for providing food. With regards to water resources evaporation will increase, the basins are projected to experience and increase in evaporation at about 15% , escalating water scarcity. In contrast to the US and Europe China is also at risk for storm surges and droughts. By 2030 the coastal sea levels are projected to rise by .01 – .16% which will only increase the likelihood of disastrous floods and droughts (Erda, et al. 2007).

Some adaptive measures in China with respect to agriculture are breeding climate stress resistant crops, creating biotechnology to improve agricultural capabilities, and promoting superior crops and growing them at a larger scale (Erda, et al. 2007). With flood and drought management China seeks to improve their infrastructure in the sectors of water supply, emergency response management and drought control (Erda, et al. 2007). They also will incorporate limited water resources on future industrial development.In order to address the coastal risk China will implement tide prevention standards for construction designs.Despite the given adaptive strategies there are many uncertainties and speculations when assessing climate change in China (Erda, et al. 2007). These uncertainties originate from; A lack of understanding the projected changes climate change will bring in the chinese ecosystem, a deficiency in reliable factors to create projection models to assess climate change, a lack of models to predict the potential impact climate change will have on societal development and a comparative lack of examination into the impact on the adaptive measures (Erda, et al. 2007). These uncertainties can be mitigated by creating integrated  models that can address many possible scenarios instead of predicting the most probable one with respect to the socioeconomic and environmental changes climate change will bring (Erda, et al. 2007). China holds the technological capability to develop these adaptive strategies and uplift these disastrous impacts. It would be the responsibility of diplomats to force a larger emphasis on sustainable development .

The United States Holds a population of 334,998,398 (3RD), In terms of wealth, it ranks 2nd in the world with 20.5 trillion GDP, and in terms of GDP per capita, it ranks 15th in the world. Geographically it borders Mexico to its south and Canada to the north(US Central Intelligence Agency, 2021)

. Environmentally the USA faces several issues due to climate change, for example, air pollution (being one of the world’s largest emitters of carbon dioxide from the burning of fossil fuels), water pollution from pesticides and fertilizers, scarce freshwater resources, deforestation, and invasive species. Some of the environmental international agreement parties the United States are a part of are “Antarctica-Marine Living Resources, Antarctic Seals, Antarctic Treaty, Climate Change, Desertification, Endangered Species, Environmental Modification, Marine Dumping. More notably, the US has implemented several adaptive strategies through its Environmental Protection Agency (US Central Intelligence Agency, 2021)

. This agency, As the name suggests, focuses primarily on preserving and protecting ecosystems and the Organism that live there. They ensure that most Americans have fresh access to air, water, and land through the reduction of environmental risk factors; they also enforce national environmental laws administered by congress (US Environmental Protection Agency, 2021). While there is a partial responsibility for private corporations to undertake philanthropy through environmental preservation, This is an example of national legislation taking an executive approach to address potential issues, in this case creating and funding an organization. The Environmental Protection Agency receives 4 billion dollars in funds in order to disperse grants across all 50 local state governments and other non for profits; this accounts for about 40% of its total budget (US Environmental Protection Agency, 2020). Although 4 billion may seem like a large investment, relative to this country’s overall wealth, it only accounts for .019% of its real GDP. This may be indicative of a lack of concern for sustainable development and climate change, especially for a country that is 2nd in terms of largest emitters of co2 globally(5.242 billion megatons) and 2nd in terms of electricity production and consumption. This is largely due to the scale of consumerism found within the US economy. By sectors, electricity and agriculture are two industries predominantly responsible for the massive CO2 emissions. Americans consumption in agriculture amounts to .9% of its 20 trillion dollar GDP amassing to $192,899,052,000. Concerning the United States energy production and output, 100% of the nation has availability, and 70% of that availability is sourced from fossil fuels, while only 21% comes from renewable resources. It is also important to mention that the US ranks first in Crude Oil production and 1st in natural gas consumption and production (US Central Intelligence Agency, 2021)

Regardless, The United States has implemented several Adaptation Strategies such as creating campaigns to Increasing Public awareness to reduce vehicle emissions by encouraging smart growth development, communal commuting such as carpooling taking public transportation or increasing access to different cost and energy-efficient forms of transportations such as bicycles or scooters (US Environmental Protection Agency, 2020).

Another adaptation Strategy being undertaken has been to combat the rising sea level. This is being done by allowing coastal wetlands to travel inland through land purchases, density restrictions, and setbacks. The agency also plans to accommodate the rising sea levels when planning for the creations of new infrastructure such as homes or businesses. The EPA also seeks to purchase Coastal land prone to environmental damage to preserve its ecosystem and attempt to restore it. In regards to flooding and stormwater management. Likewise, the EPA is determined to design a new coastal drainage system and adopt adaptive stormwater management practices. With respect to climate threats, the agency is looking to implement concrete pad fortification in homes for protection against extreme rising temperatures along with adequate wellhead housing for a proper insulation cover system made of high-density material or concrete (US Environmental Protection Agency, 2020)

6.6 Economic Strategies in the U.S.

As previously implied, these countries may not be taking the appropriate responses to combat this global crisis that will only grow exponentially larger. It is evident that the larger, more demanding nation (The United States) carries a larger portion of the burden with respect to carbon emissions. It is appropriate to delve into several other methods of emission reduction that go beyond the budget of the EPA to get a greater understanding of what is being done currently and what will be done in the future. The United States plans to implement another multitude of market-based protocols to address the issue of pollution. These protocols will ensure those responsible for the carbon emissions pay their cost of pollution. This will come in the form of emission taxes and tradable permits. This incentivizes corporations to lower their emissions levels in order to lower costs(US Environmental Protection Agency, 2020).

“Emission Taxes’, as the name suggests, can be described as a regulatory system in which corporations are taxed for the levels of emissions they release for the environment. The smaller levels they emit will result in a smaller tax burden and vice versa. Tradable permits are pollution allowances that cap the amount of pollution allowed within a company. These permits will be auctioned to companies that deem it necessary to own because of their pollution levels. These permits will be at a specific cost and will encourage corporations to reduce emissions so they will not have to bear these costs and avoid permit purchases(US Environmental Protection Agency, 2020).

The Environmental Protection Agency describes several advantages that are associated with using market-oriented policies. One advantage is that emissions can be reduced at a lower social cost due to the versatility in the methods available for corporations to reduce emissions Corporations are incentivized to remain cost-efficient therefore they can conveniently choose how to lessen their fossil fuels emissions without government intervention(US Environmental Protection Agency, 2020).

Not only would this system allow for creativity in the reduction of emissions to remain cost-efficient, but it also incentives corporations to minimize these relative cost burdens as much as possible.  This will give rise to many new methods of carbon emission reduction that can be adopted by other corporations externally. Another advantage to this approach is that it can be extended across any corporation this is due to the nature of the harmful effects of fossil fuel emission. It doesn’t matter where and when the emission occurs. It will have the same effect. In a similar fashion, the actions taken don’t need to be exact as long as something is being done to reduce emissions, regardless,it will serve as a great benefit to the environment. It is also important to note although we see that certain sectors are more responsible for carbon emissions it wouldn’t be wise to implement a sector specific approach (different sectors face different prices depending on their emission levels). For these market-oriented policies, researchers find that it will only increase the cost. They also believe it will cause bigger corporations to seek aid from international companies that offer them pollutant-based services at a  lower cost, Reducing Productivity in the U.S(US Environmental Protection Agency, 2020).

Not only will these policies be applied to corporations but also to families across the nation as well.  Economists and environmentalists find some complications in this because different households experience different consumption behaviors along with differences in wealth and income. For example, many lower-income families use a  large portion of their earnings  to consume electricity relative to higher-income households. This will cause subsidization in the electricity sector and eventually make it more expensive for the US economy to achieve its goals in carbon  emissions reduction (US Environmental Protection Agency, 2020).

The effectiveness of the Tradable permit system can be viewed through its wide scale utilization across the globe. It first became popularized with the European Union’s Emission Trading Scheme. This was first established to help European countries align to the emission reduction targets in the Kyoto Protocol(unfccc.int). The Kyoto Protocol is an international treaty adopted in 1997, by developed countries to help the reduction of greenhouse gas emissions. Currently, there are 192 countries involved, including the United States(unfccc.int). One state that has been notable for implementing the cap and trade program has been California. In a Similar Fashion, the emission trading policy proves its effectiveness as well. We can see this through an interesting residual effect by way of offsets. Offsets are a title for an outside source used by a company that reduces emissions. It is worth noting that the  “EPA’S 2010 analyses of the American clean energy and security act” provides statistics that support an offset effectiveness. It was found that getting rid of international offsets would increase the price by 54-146%, proving that offsets and market based incentives allow for flexibility and cost-efficiency(US Environmental Protection Agency, 2020).

Despite some of the efficient market based protocols, complications still arise in the estimation of cost and benefits of these emission reduction policies. There are inherent issues that arise due to the uncertainty and lack of economic models needed to predict the true prospective effect of the reduction in greenhouse gases (US Environmental Protection Agency, 2020). This is also amplified by the fact that there is a lack of involvement between both economists and scientists, that would allow for the development of possible methods and models to produce a pragmatic approach towards achieving sustainability and emissions reduction goals. (polasky,et al 2019). Some examples of this can be seen in the lack of published papers. In 2017 in a special section called Ecosystem Earth published in a scientific journal, there was not even 1 economic paper published, there was also only about 2 papers published in American Economic review with classification codes listed under renewable energy, environmental economics, energy economics, and conservation(Polasky,et al 2019). This can also be viewed by the career availability of Environmental economics which is virtually nonexistent or unpromoted. This proves that there is a central theme of economic disciplines being isolated from natural sciences and the need for urgent convergence of both fields(Polasky, et al 2019).

Nevertheless, the EPA provides some solutions for this , which includes providing estimates on the potential benefits, cost and outcomes of these policies. Researchers have stressed the significance of analyzing highly detrimental but low possibility consequences, such as the likelihood of carbon levels reaching extremely dangerous atmospheric levels within a certain time span,despite that not actually being a likely possibility.This method of analyses faced some backlash because economist fear that they range of possibilities might be too large to base a national or state policy off of due to the lack of scientific support received (US Environmental Protection Agency, 2020). But a counter argument has claimed that while that may be the case, through these exoberiante outcomes analyses, we can at the very least mitigate or eliminate the possibility of them happening through preparation.

Regardless of the many uncertainties that exist there is a plethora of literature that tries to determine the consequences of increasing carbon emissions associated with society. This includes changes in agricultural productivity, increased risk;  property damages(flood) , Residents health  etc. These estimates are accounted for using discount rates, and possible emission reductions policies. Interagency groups are also working through these estimations to try and implement plans that will eventually come to fruition if these social costs come about. This will help mitigate the detrimental effects to some degree for society. This data is also currently being updated (US Environmental Protection Agency, 2020) . There was a glimmer of hope in 2011 when the Environmental Protection Agency and Department of Energy gathered environmental and economic professionals to discuss and address the potential gaps in the current models (US Environmental Protection Agency, 2020).

Another significant ramification  of climate change is ocean acidification. This is because the ocean is engrossed with about ⅓ of carbon emissions. This causes the ph level of the water  to decrease, making it more acidic. This is a very dangerous implication for marine life and the population of people who receive a large portion of their diet from the ocean. The National center of education and Economics is currently researching the economic repercussions of ocean acidification, so they can also be accounted for as  damages caused by greenhouse gases(US Environmental Protection Agency, 2020).

In 2021 Texas, along with other southern  states, experienced an unexpected snow storm that caused at least 21 documented fatalities and left 4 million people without power(Taylor, A. 2021). This happened as a result of failure in state emergency preparedness. Researchers attribute this weather catastrophe to the melted sea ice in the arctic region, which caused disruption in the atmosphere in the northern hemisphere(Taylor,A 2021).The melting of sea ice is a current phenomena that happens due to the warming of the atmosphere that can be traced back to the release of greenhouse gases changing the atmospheric temperature. Because of a reduction in Sea ice , the sun’s solar energy is increasingly being reflected on the surface of the ocean which also leads to  the temperature rising in water, further melting the sea ice (US Dept of Commerce, 2011) .

Residents in Texas were not able to maintain their power supply which provides heat, lighting and power for a stove. Many Texas residents resorted to sleeping in cars or hotels while some stayed home and decided to burn items in their home to remain warm (Taylor, A. 2021) . Politicians were quick to point to renewable energy sources as a response to this power outage . This disaster also cost the Texan economy 1 billion dollars and researchers suggest this won’t be the only instance of extreme cold weather in the southern States of the US (Taylor, A 2021). An important projection that should be analyzed is the potential detriment in agricultural productivity that can be caused by changes in weather patterns. Texas leads the nation for farms and ranches with 248,146 farms and 127million acres of land that are used for agriculture(www.texas agriculture.gov). Repetitive changes in weather can have consequential effects on productivity in a state prominently known for producing these commodities.

6.7 Economic Climate Change Policy In Underdeveloped Regions

The US isn’t the only nation hit with severe and unique weather conditions as a result of climate change. Several African Countries are faced with unique challenges due to their diverse climate and geography. For example western african countries such as Nigeria Senegal Cameroon,Sierra Leone, the Ivory coast, Egypt, Gambia, Mozambique and Tanzania are countries that are considered lagoonal coast countries, which is understood as countries that are near the Sea more specifically the Atlantic Ocean. A large topic of contention is the fact that because these countries are largely underdeveloped therefore,  much concern is attributed to whether or not these countries will be able to properly adapt to climate change. For instance Gambia, has a real gdp of 5.218 billion (178th in the world) and a GDP per capita of 2,223(209th in the world) likewise Cameroon has a real gdp of 94 billion(96th in the world) and a GDP per capita of 3,642 (188th in the world),and The Ivory Coast has a real GDP of 134 billion(81st in the world) and a GDP per capita of 5, 213 which is 173rd in the world(US Central Intelligence Agency, 2021). It is evident that these countries relative to more developed nations such as the US are inadequate economically. An average citizen in the United States has the ability to make the annual income of a citizen in one of these west afican countries in only a month . A Large majority of the reason as to why these countries are so underdeveloped is because of imperialism and exploitation, generated by larger more developed nations that still goes on today. It is also important to note the comparable responsibility in carbon emission for these countries. Gambia is responsible for 607k mt of emission , Cameroon has a emission  of 7.62 million mt and the ivory coast has 11.5 million mt of emissions, these countries rank 180th,119th and 101th,respectively in regards to countries carbon emission rankings (US Central Intelligence Agency, 2021). It is also important to bear in mind that although these countries do not carry a large responsibility of carbon emissions they will have to bear a large portion of the burden socio economically.

Primarily these countries are susceptible to extreme natural events: storm surges, inundation,and erosion. These come as a result of the rising sea level. As a result the socioeconomic status of many countries near the coast are at risk (Dixon,et al. 2003). One example of this is shown in the loss of national resources in Tanzania. Due to an increase in .5 sea level rise, structural resources such as roads, buildings and bridges were lost, it was estimated that the cost of these losses are between 70 and 120 million US dollars(Dixon,et al. 2003). Similarly active conservation efforts of these countries near the coastline cost nearly $380 million(Dixon,et al. 2003). This high cost also contributes to the lack of implementation on adaptive strategies in these countries with an underdeveloped economy. The most likely adaptive strategy that can be implemented to address rising sea level is ICZM (integrated coastal zone management) on coastal resources in Egypt. In other countries such as Gambia and the Ivory Coast, some of the pragmatic adaptive options included are; innovative sand management, construction of dikes, low cost sea walls, wetland preservation along with a ICZM plan (Dixon,et al. 2003).

Another large concern is the scarcity in the resource of water. Amongst all of the continents Africa holds the greatest amount of countries that are water-stressed. Climate change could negatively affect the water dependent events that contribute to economic growth and societal benefits. This decrease in water availability could manifest in the way of waterborne diseases due to a drop in the quality of freshwater resources(Dixon,et al. 2003). Because of this the demand for adaptive strategies with respect to water resources has escalated. Although not many have been generated because of variability in the prediction of precipitation, several African countries assessed a need for increasing domestic water supply and  maximizing storage capacity through water basin transfers (Dixon,et al. 2003). This method has caught the eye of diplomats across Africa who even brought upon the idea of extending water supply from international waters such as the Nile river, this calls for the need of collaboration from international aid which has not been witnessed yet (Dixon,et al. 2003). Conversely, Botswana has come up with a unique approach to try and lower the demand for water. This is being done through the decrease in irrigation by turning to agriculture that is less water dependent (Dixon,et al. 2003).

These topics are all necessary to discuss because ultimately they impact the lives of many people and wildlife that reside in these at-risk locations. For example two countries; Malawi and Zambia an assessment of wildlife vulnerability was conducted and they concluded that the largest threat to wildlife is their inability to adapt to these ever changing conditions to natural habitats(Dixon,et al. 2003). As previously mentioned this is a factor of industrialization and the deforestation associated with that, this is further intensified with a decrease in precipitation and increase in temperature. Two species that are currently being observed as declining are nyala,( which are at risk due to the inability to adapt to climate change induced habitat changes) and zebras. The decline in precipitation and rainfall could also have a great adverse reaction on wetland species(Dixon,et al. 2003).  This further creates a snowball effect on the economy of these two countries that have a reliance on ecotourism as a source of monetary growth. With a diminished wildlife population and dispersion not many tourist will find interest to visit these areas, this could lead to a loss of jobs and put a dent on the economy(Dixon,et al. 2003).

With regards to human health the escalation in temperatures and a decline in water and water quality is a highly detrimental factor that will impact the welfare of many inhabitants. Heat-stress and low availability in water has already plagued Africa and climate change will exacerbate these issues(Dixon,et al. 2003). High temperatures can generate greater rates of malaria and dengue and an inferior standard of water can produce more water borne diseases as formerly mentioned. In addition to this A number of african countries already have poor healthcare infrastructure(Dixon,et al. 2003).

Similarly A region that is also at risk is the middle east. For centuries the middle east has experienced many distressing events  that can be attributed to the escalation and volatile political climate. This caused a a responsive population concentration into specific regions in the form of refugees seeking aid or a better life,additionally these regions are still developing in their own right.Oftentimes these countries accept these refugees but aren’t properly prepared to address the poverty trap that can occur with an increase in population growth that doesn’t align with economic growth of their respective countries. An article titled “Impact of climate change on the water resources of the eastern Mediterranean and Middle East region: Modeled 21st century changes and implications” give insights into how several middle eastern countries will face environmental and socio economic dilemmas in the 21st century (Chenoweth,et al. 2011). The article describes a projected 10% decrease in precipitation between the years 2040 and 2099 across the middle east, this could lead to a larger issue because this will result in a decrease of water per capita specifically in countries such as; Turkey, Syria, Iraq and Jordan, that have a large agricultural dependance(Chenoweth,et al. 2011). This has already been witnessed, in the middle east water resource per capita has decreased from 2350 m cubed per capita in the 1930s to 111m cubed today(Chenoweth,et al. 2011). The article concluded that there is a need for sustainable technological and economic development that will reinvent the way water resources are managed. Primarily the article stresses the demand for desalination devices to purify water which has become more affordable in recent years(Chenoweth,et al. 2011).

6.8 Global Outlook Of Climate Change and Adaptation

It is evident that there is a need for sustainable development across the globe. Through the analysis I find that  developed countries bear most of the responsibility with regards to carbon emissions. Although this may be the case this is not consistently translated with their expenditure on adaptive strategies. I’ve discussed two developed countries that experience two different challenges with respect to adaptive strategies but a consistent theme is still apparent, a lack of diplomatic involvement with concern for societal and economic disruption.This is further aggravated by the shortage of collaboration between economists and environmental scientists, that are abundant in their respective countries . Nonetheless there is still hope for these countries because of their developed economies and rapid measures they can employ to mitigate damages. In contrast many developing nations that exist in areas such as the middle east and Africa face upcoming challenges for the 21st century. Higher temperatures and low availability of quality water resources will give birth to and exacerbate new and existing maladies. Many of these countries are not properly equipped to deal with climate change; this is supported by the fact that they cannot properly sustain their own economy given their current population. A majority of these countries are extremely poor and lack the resources and technological capability to adjust to climate change. Adaptive strategies are very costly and will require the aid of developed nations, but as history shows, this can lead to further exploitation and further deterioration of their own country. Conversely in neighboring regions such as southeastern Europe, water resource will not significantly decrease so there is not an urgency to adapt. This leads me to a common trend that has exposed itself during my analysis; which is that underdeveloped countries that experience constant exploitation will haul most of the unfortunate consequences that are associated with climate change, consequences that can be linked directly to developed nations. This analysis also gives rise to a speculation produced by researchers in the article titled ”  Global climate change, war, and population decline in recent human history”. It was concluded that throughout human history there is usually a war and population decline that is followed after a change in climate  (Zhang,et al. 2007). I totally agree with that speculation. The projected changes in climate will force a decrease in available water supply per capita and between countries, introducing a new wave of scarcity in agriculture. This will inevitably result in inflation prices for basic human necessities such as food and water, this price inflation will cause significant hardships across the globe and if Covid-19 crisis exposed anything it is that people exhibit tribal behavior in a time of  distress, this may lead to violence and further increase current inequities. There will also be an increase in temperature inducing heat stress that will manifest in the form of multiple ailments, in addition climatic disasters will dramatically increase. This begs the question on how society in the 21st century will respond to these climatic changes.

6.9 Kutan – Study on Financing Renewable Energy Projects

One of the hardest barriers to overcome is the initial cost of implementing a system that tries to switch from a traditionally non-renewable energy to a renewable energy source. There are two ways that Kutan et al. noted, they found that the role of Foreign Direct Investments (FDI) inflows to the home country and the use of the stock market have an important role in the promotion of clean energy to be used across the world (Kutan et al, 2018). As well as political support that acts in favor to minimize the effects of emissions. An important note is that in the study with Kutan, they are focusing on major markets instead of emerging markets. This study would apply to the countries like the U.S, China, Spain and many more across the globe. The study mainly focuses on the countries of Brazil, China, India, and South Africa. These countries were selected because during 2014, these countries contributed more than one-third of the global investments in renewable energy (Kutan et al., 2018). These countries also are pressured by international organizations because they are responsible for some of the highest levels of CO2 emissions.

The authors briefly entertained another study in reference on Eurasian countries from 1992-2007. It was documented that the relationship between renewable energy consumption and economic growth are positively related. When renewable energy consumption increases so does economic growth and vice versa. This trend also occurs with non-renewable energy sources as well, the jump from non-renewable to renewable energy is occurring but very slowly. With high demand currently for energy, there is no easy way to have renewable energy sources readily available to immediately appease the demand. Many estimates for mass implementation of renewable energy are close to thirty years away near the year 2050.

FDI was a factor in developing renewable energy because this was one of the biggest capital sources available for innovative technologies. The FDI inflows also allow the transfer of technology with improved modification to the host countries which will help promote products as well as increasing the speed at which renewable energies are generated. In addition to providing a means of exchange for innovations from across the globe, businesses will have cheaper and easier access to capital which increases the efficiency that renewable energy technologies will be available and accessible (Kutan et al, 2018).

The study that Kutan did with his colleagues used data from 1990 to 2012 on major emerging market economies. In table 1, isolating the CO2 and FDI variable, the trend is typically this, a country with a higher FDI will also have the lower CO2 growth rate. Looking at the table below, South Africa has the lowest CO2 growth rate with the highest FDI. With foreign direct investments being a key factor, it is important for politicians to intact further policies to promote renewable energy products and provide tax and non-tax benefits to renewable energy investors to motivate globally and domestically.

Financially, the reasons why FDI and stock markets influence the way renewable energies are acclimated into society are clear cut. There are a few reasons why the transition to clean energy is occurring slower than expected and is not just implemented directly and suddenly. In a quote from the research from Sorbonne University, “…the main predictors of the decision to invest in RE (renewable energy) crowdfunding are: (i) the general opinion about the RE sector (positive), (ii) opinions about the RE sector durability (i.e., business continuity over time) and investment opportunities transparency (positive), and (iii) risk perception (negative).” This quote dives into the ideas of the consumer mind and why getting crowdfunding behind renewable energies can be so complicated. It breaks it down into three parts on investing. The idea of the sector, this is where renewable energy has the benefit over oil and natural gas because since it is less impactful on the environment people tend to have a more positive outlook onto the subject. The next idea in this is feasibility, if the market is proven and shows room for growth as well as profit then it will drive the third idea. The third idea is investments, if the environment around the market is volatile then no investors will put their money in. When there is no money to invest then the market essentially dies off. In terms of the market for renewable energy it is filled with potential and the demand to make it a reality but there are substantial barriers of entry to attain this goal.

6.10 Default risks, moral hazard and market-based solution: Evidence from renewable energy market in Bangladesh

Renewable energy has two main hurdles to overcome to be used effectively and efficiently in today’s markets. The first is implementing the switch which will be extremely costly and require a high investment cost initially, the long-run is where everyone will benefit. In other terms to find a balance between welfare and commercialization when producing these technologies. This will produce both known and unknown effects on the future of the renewable energy market. The next is having the technology be efficient enough to actually produce the output at a lower cost than non-renewable energy or else the majority of people will not be able to afford to switch and only upper classes will have access to these technologies. The study done in Bangladesh goes into great detail on why one of the first implementations of solar houses failed.

In Bangladesh, there was an effort to implement solar panels into homes by Infrastructure Development Company Limited (IDCOL) (Hossain, 2021). Around 4.3 million homes adopted solar panels and of that 4.3 million, 1.2 million households became in default because of their expensive payments for their solar home. The fact of saving on the energy bill was not a draw in this scenario. Mainly due to the fact that the company aggressively distributed solar homes without first checking their customers ability to repay the installments. Also, the POs attitude towards collecting dues from customers increased the default risk situation (Hossain, 2021). The study mentions that the factors that they used to determine the reason for default were up to four main factors, financial constraints, high price, lack of service and disaster. To avoid these, the company supplying the solar panels should have done research on the local economy to see if prices would severely skew the data. Since they did not, this study provides information on how not to implement solar panels.

To avoid the default risk and other issues with renewable energy products the author suggests that a subsidy oriented government sponsored program is not the best way because of the failed Bangladesh study. Instead the government should share some of the spillover taxes from the projects with private investors to increase the rate of return making it more attractive to invest in. Then afterwards, it could be introduced to the commercialized sector which will speed the process of adopting the technology exponentially faster (Hossain, 2021). Towards the end of the conclusion the authors also bring the idea of a carbon tax as a green revenue bond to increase investments into renewable energy.

6.11 Carbon Tax – Implementation on Fiscal Policy

An idea that was a product of trying to limit carbon emissions was a carbon tax on major polluters. By implementing this it would raise revenue and start to address climate change. A carbon tax is clearly a valid solution to the problem faced today, it would put an increased cost onto the use of oils and other fossil fuels. With the increase in costs for fossil fuels it would make renewable energy sources more comparable in price as well as deter businesses from using nonrenewable energy sources. The biggest issue with a carbon tax is how to implement it without affecting the output of a country. Again, this is due to the immediate and growing demand for energy without having the resources to implement the change immediately.

In the study done by Barrage, the solution after his study was to have governments disregard taxes in general and set carbon taxes at Pigouvian rates, this may distort some labor markets but keeps the revenue made from taxes on par to previous earnings. Even though this study dives deep into the fundamental steps to deciding the exact tax level, after a few months the data will no longer be useful except for historical purposes because the amount of pollution will continue to increase exponentially. With this, it adds another level of complexity thus harder to implement as well and not a very feasible solution. When a carbon tax is implemented there is potential to increase revenue depending on the amount charged as well as the amount of pollution still occurring. The majority of data set in this study concludes that carbon taxes could increase revenues and improve production efficiency in the long run (Barrage, 2020).

Considering that the complete switch from taxes to just carbon taxes is near impossible and not really feasible for governments and people alike, Barrage also talks about how to implement the carbon tax onto a system with taxes already in effect with government policy. Through a sensitivity analysis, 3%-36% decrease to taxes would occur to account for the increase in the carbon tax in a fiscal environment. The author then turns to analyze the effect an increase in government spending would have on the tax. With a 10% increase in revenues from the carbon tax when it was doubled, government spending actually decreased by 10% with the revenues diminishing as well (Barrage, 2020). Fiscal outlook plays a major role in the carbon tax because it will directly affect the magnitude of climate policy adjustments and the associated welfare gains.

A main theme in most of the studies talked about above, without any form of government subsidies or a way to increase the desirability of the market in some way and draw a huge increase of investors the switch from energy sources may not happen for the foreseeable future. The government plays one of the most important roles because it has the political power to implement these things if it was higher on the agenda.

6.12 Electric Cars

In the electric vehicle market the past three years (2017-2020) have seen a significant increase in the amount of attention this subject is getting. Stock in electrical vehicle companies have increased and recently crossed the 3 million mark in 2017 and is expected to exceed 5 million in 2018 (Nour, 2020). The market is still limited though, the most successful rollout of electric vehicles was in Norway which at its peak reached 46% of the market share, with the next successful country-wide rollout being Iceland which is at 17% (Nour, 2020). With such a difference between first and second it shows that this is an emerging market with huge potential if marketed and funded correctly.

In section 6.3.2, the importance of getting crowdfunding behind renewable energies is important to the development of these technologies. A great way to put this in perspective is the example of Toyota who was one of the first companies to introduce an electric car but was a complete fail due to marketing. They were one of the first companies to produce electric cars but when the specs of the car, a Prius, were released the car was more of a laughing stock than anything else. No one wanted to own a Prius because it was not viewed in a positive way, it was looked at as a kids toy due to the physical factors of the car. Not directly due to the fact that it has an electric motor, which in comparison from the initial release of the Prius in 1997 to now the technologies in the electric motor has no real differences compared to a gas motor. A very successful roll out of electric cars can be witnessed today by a company Tesla. This company is run by Elon Musk who is revered as a brilliant businessman and entrepreneur. By incorporating better technology, better design and more capabilities, as well as mass appeal of being futuristic and luxurious. Tesla is currently sitting near the top of the car industry. Currently in 2021 Tesla’s newest model is retailing for just under $100,000 with the capability to go 0-60 mph in 1.9 seconds and reach speeds of 250 mph.

Today there are a broad range of electric vehicles on the market from several manufacturers which all come with different specifications in engine quality, performance and standards. Electric vehicles have a wide range of applications for the individual, but will have drastic effects on things like the power grid and how to produce that much energy for each individual car. With progressive inventions and innovations though, the technology has the capability to catch up to the idea. The extra strain on the power grid would not be ideal especially when one should consider if the demand exceeds the supply at some point there is the possibility that there could be huge spikes in the price of energy in general not just renewable or nonrenewable. The price of energy is a driving factor and is why most use non-renewable sources because they are inexpensive, easy to acquire and readily available. Renewable sources currently are none of those.

6.13 Wind, Solar, Hydroelectricity

The European Union is largely responsible for the price decrease of wind and solar energy due to their ambitious policies towards the renewable energy sector. With over one million employees in this sector, Europe is the biggest manufacturer of wind turbines (EU). The European Union believes and feels that their goal is to achieve technological innovations that will drive the development of these renewable energy sources to one day be able to replace non-renewable energy.

In Sweden, there was a study conducted to find how the economy and environment would be affected if Sweden went from nuclear power to a renewable source like wind and solar power. The setup was to fully replace the amount of energy nuclear power emits with an emergency backup system of natural gas. The Carbon-Neutral Scenario (CNS) was published in 2016 that contained plans to have the Nordic region carbon-neutral by 2050. In this scenario, the country would have to increase the wind energy supply from 7% to 30% (Hong et al, 2018). In order to maintain the levels that could sustain an entire country, the role of storing energy to use becomes increasingly important. When something as simple as the seasons are changing, renewable energies like wind, solar, and even hydroelectricity will change their output of energy as well. Either producing more or less energy but being able to store it when there is a surplus of energy will be to the benefit of everyone. Where this study lacks is that it mentions that it fails to address the problem of financing the shift to renewable energy, the authors mainly focused on the energy output of each source of renewable energy.

The importance of seasons and understanding the climate of the area where renewable energy is entering is key to the overall energy output and whether or not it will be sustainable. Usually, a combination of all three would optimize the results based on energy output, but depending on the environment around the area a renewable energy source may be unproductive and not worth the initial costs to the investment. For example an area in a dry warm climate like a desert would not invest in hydro-electricity since there is already a scarce amount of water. A better investment for the area would be photovoltaic solar.

Greenhouse gases are preferred in creating energy currently because they are relatively inexpensive which keeps the cost of producing energy relatively low (Hong et al., 2018). Moreover, when renewable energy is introduced it holds heavy initial costs and is limited in the amount of energy it can produce in a given year. To continue to improve renewable energy technology to get it to where it is affordable will take time, there may be minimal changes in price for decades to come. With these in mind it can create a huge jump in the price of energy if the change were to be implemented.

When analyzing the results from this, the author concluded that with resources and the technology we have in the present day, it would not be feasible to switch from nuclear power to renewable sources. The switch would require a shift that would require the demand for energy to significantly decrease or the prices of energy will increase significantly (Hong et al, 2018). An interesting aspect of this study was that when setting up the trail to receive data it was found that a mix of wind and solar could keep up with energy output from hour to hour for the majority of the year (Hong et al., 2018). The problem occurs that when there is not enough energy it will devastate the electrical grid and cause different problems then the emissions.

Through the dry and wet years that were studied wind was the single most important renewable energy source. Producing over half of the energy for the year, wind was important but an underutilized energy source was hydroelectric. Hydroelectricity requires moving water to turn gears and generate movement therefore energy in a basic description. Hydroelectricity is one of the most reliable sources of renewable energy but contributed the least to Sweden’s overall energy. Since hydro electricity was under utilized, in combination with wind energy a local area could rely on those for its energy production for the year. The problem resided that areas with the most consumption of energy were not located near the hydroelectric plants. Even though a wet year contains more potential for hydroelectricity, the main producer in Sweden was wind which drops significantly due to weather change between a dry year versus a wet year (Hong et al., 2018).

Clearly the problems for switching to renewable energy are difficult but can be overcome. The first initial problem is (1) how to economically produce on a large scale cheap and accessible renewable energy sources for a majority of the world. Next problem occurs with (2) how and where to distribute the resources.  The first problem can be solved through the use of FDI inflows as well as the stock market increasing the attractiveness of companies that manufacture these renewable energies. The second would be solved by the years of statistical data on weather patterns of the geographical area then determine the output of energy required and a few calculations on output and averages then the solution becomes clear. Both of these barriers are huge hurdles but with the right implementation plan is not only possible but feasible as well.

6.14 Long-Term Plan for 80-85% of Energy Being Clean by 2030

Many problems occur when trying to implement the change from non-renewable to renewable energy. Whether it be taxes, payments, or even feasibility of implementing such change. It has come to the point where we must act to save our environment. Forecasted numbers for the amount of electric vehicles on the road by 2030 is between 130 and 250 million (Nour, 2020). This is a great start because after producing energy, cars are one of the next biggest contributors to emissions globally.

The original goal to have a certain percentage of energy that is produced globally be by renewable sources was back in 2011.  The goal was aggressive but achievable with the correct steps, the original goal was to have 80-85% of the energy produced globally by renewable sources or ‘cleaner’. As time has gone by that goal seems more and more aggressive and unachievable by 2030. In 2017 Pereira and associates wanted to state that the energy efficiency global goal from the European Union is now at a minimum of 27% for 2030 (Pereira, 2017). The new goal is so much lower than what was predicted to be possible at the time. The sharp number change is from not receiving the funding or the attention that this dramatic change needs to take place. However, a  growing support for better energy has increased over the past few years. The problem with the new minimum for renewable energy is that it is a pledge that is non-binding if the goals are not met (EU). Basically no penalty for not doing what the nation originally said which could be another reason that the goal has not already been met.

In the European Union, clean energy and renewable energy are factors that create a low carbon economy. With all consumers in mind for the energy project, the poor and energy poor should be able to access these energy sources easily. Producing energy efficiently is important, if energy cannot be produced easily and without harm to the environment then the goal of producing clean energy is impossible. A combination of more than one source of renewable energy may be the solution.

To conclude, as one may see there are plenty of fiscal reasons not to take on renewable energy sources as the only means of energy. Houses usually even have a backup system when the power grid fails during storms or crisis, which is why having a pack up system of non-renewable energy could be the solution. The idea, lower emissions through renewable energy let the environment recover from the industrial age. With lower emissions, this does not mean to completely disregard the use of fossil fuels and natural gases to make energy, only limit them. Limiting could be the use of a carbon tax or a cap on emissions for the year but is becoming increasingly important because all around the globe there are signs of global warming and damage to the environment through these emissions. Renewable energies are the future but without assistance from the government or incentives to pursue the market for renewable energies, as a species we may enact this change too late.

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