Economic Growth and Climate Change
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Economic growth is measured in terms of per capita growth. Higher economic growth results in raised standards of living. Many countries such as Britain, United States, China, South Africa, streamline economic growth objectives in order to enhance domestic policies such as reduction of income inequalities, facilitation of an enabling environment, and expansion of the productive capacity.
Economic growth has been identified as one of the key strategies that can help countries meet Millennium Development Goals (MDGs). These are development objectives to be achieved by 2015, and have been accepted by all member countries of the United Nations. Millennium Development Goals are: eradication of extreme poverty and hunger, reduction of child mortality rates, gender equality and women empowerment, universal primary education, environmental sustainability, improvement of maternal health, combating diseases such as malaria and HIV/AIDS, and development of a global partnership for development (Eight Goals for 2015, 2013).
There are many national and international activities that are intended to spur economic growth of countries and regions. The cancellation of debt for Heavily Indebted Poor Countries, (HIPC), has enabled countries such as Ghana, Zambia and Egypt re-channel resources to improve service delivery as well as eradicate poverty. There are government organizations which assist in achieving these goals, and they include; United Nations Millennium Campaign, the Millennium Promise Alliance Inc., United Nations Millennium Campaign and the Global Poverty Project, among others.
The primary goal of increasing economic growth is to increase capacity to produce, thereby raising Gross Domestic Product (GDP) and per capita income. Economic growth objectives have not been compatible with objectives to have a sustainable environment. With the worldwide acceptance of capitalism and free ownership rights, individuals, firms and governments have embarked on a more intense attempt to amass wealth and improve standards of living. Production activities have mostly affected the environment in negative ways, especially through pollution. Chinese, Russian, and Brazilian governments have put up measures to encourage employment in manufacturing, processing and service sectors of the economy. In developing countries, such as Ghana, Zimbabwe, Nigeria and India, funds have been set aside to empower women and youth through accessibility of cheap loans. These loans are used attract the unemployed into engaging in entrepreneurial ventures. Similarly, developed countries, such as United States and Japan, have encouraged more manufacturing and construction activities, partly for the same reasons. In general, there is a tendency for firms and governments to encourage more industries and lines of businesses to cater for the increased domestic demand and expanded international market.
With regard to eradication of extreme poverty and hunger, specific steps of the MDGs include reduction of the number of people living on less than a dollar a day, those who suffer from hunger, and those who have no decent employment. With regard to ensuring environmental sustainability, specific steps include; reduction of carbon dioxide emissions, consumption of ozone-depleting chemicals and increasing forest area (Eight Goals for 2015, 2013). The specifics to environmental sustainability are not integrated to match those for poverty eradication, though direct consequences of increased production are known to lead to pollution of the environment. Even though environmental sustainability initiatives reduce effects of pollution, they are not emphasized. In many countries, they have become the concern of non-governmental organizations, though some corporations engage in green initiatives for public relations purposes.
A study of relationship between economic growth and environmental pollution was conducted in Zhejiang province in China, and it revealed that the province reaches a harmonious coordinated level of the environmental protection at an early stage of economic growth (Yang, Yuan, & Sun). However, other studies have proved otherwise. This indicates that provinces and countries may have differences in resident requirements of environmental quality as well as differences in equity transaction markets. Other empirical researches revealed that environmental protection and economic growth can be coordinated, when there are and stricter environmental policies and larger environment investment. Day et.al (2003), in a study in Canada, found out that there was bidirectional causality between income and environmental quality.
China, the world’s second biggest economy, produced 2.3 million tonnes of electronic waste. This is the second largest in the world. Electronic waste is also imported from overseas. This waste releases pollutants to the environment. It can also harm humans. However, much of this waste has been disposed properly. China has a population of more than 1.2 billion people. Its ability to produce enough for domestic and export purposes shows that it is economically endowed with resources. However, rewards for its growth will be frustrated by increased pollution. Necessary environmental pollution strategies have to be put in place(Watts, 2012). A Chinese green GDP estimate given in 2006 stated that for year 2004 and 2009, pollution cost 3.05% and 2-10% of GDP respectively. A World Bank estimate given in 2007 stated that the cost of air and water pollution in China was 5.78% and 2.68% depending on whether a Western or a Chinese method of calculation was used. Experts have predicted that air pollution in China’s would become its biggest health threat. There are many industries that have come up, and which are emitting massive amounts of dangerous gases(Watts, 2012). A 2012 study revealed that pollution had little effect on China’s economic growth, largely because she is more dependent on increased energy consumption and physical capital expansion. This was attributable to her manufacturing and heavy industries. The study also revealed that China would continue usingpolluting and energy-inefficient industries.
Upcoming economic giants have developed ambitious plans that focus on laying impeccable infrastructure and technology. These countries include BRIC countries (Brazil, China, India and Russia). This, together with increase in number of the middle income earners, has led to much construction of houses, roads, rail, and buildings. Increased construction has led to more emissions of carbon gases. Furthermore, the expanded middle class translates into more consumption of vehicles. Vehicles emit gases through exhaust fumes. The gases emitted are mostly carbon compounds, are emitted to the atmosphere, causing to global warming. In the developing world, the expansion of the middle-income earners translates into increased populations because large families become manageable. To many residents in Africa, for example, it is still fashionable to have large families. Increased populations results in increased demand for goods and services. This necessitates increased production, resulting in more emissions. In addition, deforestation is common in most parts of the third world. Forest cover is sometimes cleared to pave way for fast income-generating activities. This depletes a crucial mechanism for reducing the impact of greenhouse gas emissions.
The role of governments and markets in transition towards a low carbon economy
Governments and markets play a crucial role in the transition to a low-carbon economy. Countries involved are mainly members of the United Nations. They include Britain, Denmark, Germany, Mexico, Saudi Arabia, Botswana, Mali, among others. Efforts to contain carbon gas emissions come in the wake of increased awareness, reports and campaigns regarding the effect of these gases on the global climate. For example, a recent report revealed that the fossil fuel resources available in the world today can produce 9-13 trillion tonnes of greenhouse gas emissions. If no carbon was captured, average temperatures would rise by 18 degree Celsius. Further reports show that planned fossil fuel projects would add about 2 trillion tonnes of green house gas emissions by 2020(Knight, 2013). The industrial revolution alone led to about 0.5 trillion tonnes of emissions of carbon. If the atmosphere was to be returned to a safe level of carbon, then emissions should fall almost immediately, and cease completely by 2050.(Knight, 2013).
Resource taxonomy enables categorization of resource availability and efficient energy sources. Potential reserves are resources that are potentially available but which depend on technology and people’s willingness to pay. They include wind and solar energy. These have been developed in some countries but they are prone to challenges mostly because of lack of technology to produce energy at a large scale. Current reserves are those that can be extracted profitably at the current prices. They include; coal, natural gas, oil, among others.
Countries such as Dubai and United States are monitoring the use of depletable resources. These are those that are replenished at a very low rate and can be exhausted. The definition includes those that are not naturally replenished. High demand for these resources causes their depletion rate to be high. The Dubai administration has recently embarked on projects that will turn Dubai into a world class tourist destination center. The decision was made after the administration realized that oil, which forms the backbone of the Dubai economy, may be depleted in the next two decades. The dwindling stocks will now be allocated among future generations. The administration has assumed leadership in management problems with regard to depletable resources. United States invests heavily in research and development of recyclable resources. Recyclable resources can be recovered for future use. Renewable resources are naturally replenished. They include water, forest, wind and solar energy. A management problem for many other countries has been to initiate such allocations, and transition to renewable sources of energy. Renewable resources can be stored as a means of smoothing fluctuations in demand and supply. Development of wind and solar energy has been inhibited mainly because of their flow characteristics. Governments, such as the United States government, in association with the private sector, are instituting major changes in the availability, management and use of energy. These changes will lead to a carbon economy that ensures balance of costs and benefits, environmental impact and energy security. The outcome has been efficient use of resources and reduction of fossil fuel price volatility. Other advantages are development of renewable sources of energy and early mover advantage, a long-run comparative advantage.
It has been discovered that the major cause of climate change is economic growth, followed by population growth and efficiency in the use of energy in that order. The evidence comes from comparison of economic activity, energy use and emissions, and environmental impact of emissions in various countries, household surveys on income and emissions, changes in expenditure, population, quantity of carbon produced and amount of emissions. This report recommended that economic and population growth rates be contracted, energy be utilized efficiently, and renewable sources of energy be used, so as to reduce carbon emissions, (Knight, 2013). Alternatively, large-scale tree planting projects to remove carbon dioxide from the atmosphere, and increase cloud cover to reflect solar radiation back to the atmosphere, should be undertaken. Governments, such as United States and Japanese governments, have encouraged citizens to use public means of transport in order to facilitate management of traffic jam and control of gaseous emissions.
Significant efforts have been made to reduce the use of carbon energy sources. Furthermore, they started initiatives that control respective populations (Knight, 2013). Countries that make the largest carbon emissions have been put on the spotlight. They include China, United States, and Germany. United Nations has advocated for agreements that ensure that carbon gas emissions are reduced and all countries have taken part. The creation of a Green Climate Fund was proposed in the Cancun climate change conference in 2010. In the Durban conference of 2011, the charter and the Fund’s board of directors were launched. In the 2012 Doha conference, it was agreed that funds would be disbursed in 2014.
Some efforts targeting control of climate change have been applauded while others have been condemned. One of the condemned actions includes a resolution of the delegates of the 18th Conference of the Parties (COP-18) to the UNFCCC (United Nations Framework Convention on Climate Change). The Doha conference, was held in December 2012; the delegates agreed to discuss the adoption of a binding agreement to ration carbon emissions by 2015 (Bailey, 2012). It also supported the resolutions of the Kyoto Protocol, which required rich countries reduce their carbon emissions by 5.2%. For example, it had originally required United States to cut emissions by 7% below its levels in the 1990s. Unfortunately, United States did not ratify the treaty. In addition, countries such as Russia, Japan, Canada and New Zealand pulled out (Bailey, 2012). Only a few countries and organizations agreed to remain in the treaty yet they cover only 15% of carbon emissions. They include Australia, Norway, Switzerland and the European Union. Furthermore, each country would determine its own carbon emission targets for the year 2020. Binding agreements have since been ignored (Bailey, 2012).
Governments have not lead by example. For example, in the 2009 Copenhagen conference on climate change, United States had promised to cut emissions to below 5077 gigatons of carbon dioxide in 2020. In 2005, it produced 6118 gigatons of green house gases (Bailey, 2012). This is a small amount considering that the levels have increased over the years. However, the switch from use of coal to the use of natural gas to produce electricity has enabled countries reduce carbon dioxide emissions. Natural gas is less carbon intensive (Bailey, 2012).
At the Doha climate change conference, delegates endorsed the creation of a Green Climate Fund. Unfortunately, most time was spent in negotiating process that would create a mechanism that compensates poor countries for damage associated with climate change, since they have arguably been the most vulnerable to impacts of emissions of green house gases. The compensation funds would be put in a Climate Reparations Fund.
Markets and companies have not been left out in the campaign for reduction of green house gas emissions. These initiatives are known as Green Initiatives, and they have been structured to shift preferences for eco-friendly products. Concerned companies now produce eco-friendly products such as recycled paper. Paper Culture is an American company that has taken up such measures. It has embarked on carbon reducing projects such as reforestation initiatives. Being an online stationery company, it offers personalized stationery and cards. These cards include holiday cars, baby shower invitations, baby announcements, and are printed on 100% recycled paper. With every order, paper culture plants a tree in United States forests. Paper culture’s association with the American Forest and Paper Association, has made its goals possible (Linda, 2013). Conclusively, all governments can liaise with the private sector to develop green initiatives. These efforts demonstrate sustainability leadership and environmental responsibility within the paper products industry.
Efficient allocation of renewable resources through constant marginal costs, and technological progress, has been the concern of the Asian tigers, i.e. China, Japan, Malaysia and India. These countries are reducing costs of environmental pollution through cleaning initiatives and giving subsidies for production of eco-friendly packaging materials. Cost-benefit analysis is done to ensure that marginal extraction costs of minerals are not more that marginal benefits for it. However, technologies are constantly being developed and used to reduce marginal extraction costs.
It has been discovered that the major cause of climate change is economic growth, followed by population growth and efficiency in the use of energy in that order. The primary goal of increasing economic growth is to increase capacity to produce, thereby raising Gross Domestic Product (GDP) and per capita income. Economic growth objectives have not been compatible with objectives to a sustainable environment. Production activities have mostly affected the environment in negative ways, especially through pollution.
There are major changes in the availability, management and use of energy. These changes will lead a carbon economy ensure a balance of costs and benefits, environmental impact and energy security. The outcome has been efficient use of resources and reduction of fossil fuel price volatility. Other advantages are development of renewable sources of energy and early mover advantage, a long-run comparative advantage.