Sample Report Paper on Climate Change

Climate Change

Introduction: Identifying the Problem

The market is said to have failed when the competitive outcome of the market is not efficient and beneficial to society as a whole. When the negative impacts of economic activity did not fall on those conducting it, but to the blameless and the future generation, the market has failed, thus, warrants public policy solutions. One of the worst results of world market failures, as described by Stern (3), is climatic change. In his report, Stern points out that climate change affects the basic life elements of people around the globe. Fatefully, the worst affected are the developing countries, despite the fact that their contributions to climatic changes are less compared to that of the developing countries. The climate of the world is changing, and the changes will have serious effects on the people on the planet, cities, energy use, and ecosystems. The average air temperature of the globe is already 1.5ºC higher than what was experienced at the onset of the 20th Century and has gone up by approximately 1ºC above this level over the past three decades.

According to the last report that was issued by the Intergovernmental Panel on Climate Change, or rather IPCC, the average temperature of the world is prone to go up by an additional 2 to 8.6ºF come 2100.[1] If an insistent action is taken towards reducing atmospheric emissions, then the changes in temperature are likely to be moderate. However, if human activities are maintained on the same course in which they have been, there would be a substantial temperature change. Most scientific experts are in agreement that the climatic changes are anthropogenic, implying that they are caused by human activities, to a large extent of gases emitted into the atmosphere whenever fossil fuels are burnt because they trap heat. Amongst these gases, Carbon (IV) Oxide or carbon dioxide emissions are the most common, having carbon dioxide at their highest level in six hundred and fifty thousand years. This memo discusses the change in climate as a result of market failure in the world economy.

Identification of Whether the Problem Affects the Public

Climatic change is the change in weather conditions over a period of time, usually more than 35 years. It is brought about, as economists explain, by negative externalities related to market failure (Stern 11). For example, the world has reported an increase in the emissions of greenhouse gas, which are basically released from economically valuable processes. The rise in demand for energy, which is basically made of carbon, has increased the amount of fossil fuel that is processed, and this has resulted in an increased emission of greenhouse gases into the atmosphere. The impacts of these emissions do not affect the immediate beneficiaries of the economic activities in question, but the world at large. Studies have shown that developing countries are more vulnerable to the negative effects of climate change despite their lesser involvement in high energy consumption and polluting economic activities (Schelling Increased degrees of greenhouse gases in the atmosphere alter the normal functionality of the environment.[2] It results in food and water shortages while increasing health risks due to air pollution. Schelling further alludes that greenhouse gas emitting activities are extensive in developed countries, while the negative impacts of the same emissions are manifested in the poor countries too ( The number of automobiles and industries that emit carbon dioxides, such as oil refining industries, paper milling industries, fertilizer manufacture industries, and cotton are more in developed countries than those that exist in poor or developing countries. Since they emit more carbon dioxide in the atmosphere, it is unfair to expose the developing countries to the same effects of climatic changes.

Carbon dioxide acts as a blanket that inhibits the release of excess heat into the atmosphere, when it becomes released into the atmosphere in large quantities, a lot of heat becomes retained in the environment. As such, there is a high likelihood that ice found in the polar regions will melt, thus raising the sea level. With such, it is equally likely that most water bodies would burst their banks causing floods. Nonetheless, poor countries record the highest rates of droughts, water shortages, and coastal flooding because they lack enough funding and facilities that can be used in alleviating the effects of climatic changes. From this given case, it is clear that this market failure has both economic and moral effects on people. It is wrong for developed countries to emit carbon dioxide into the atmosphere in large quantities and share its negative effects with developing countries that contribute less to the problem. Secondly, developing countries would have to allocate a lot of finances to alleviate the effects of drought and flood on their citizens, thus constraining their finances.

The cost and risks of climatic change have been identified as detrimental factors to economic growth. Stern (17) states that the world is losing 5% of its Gross Domestic Products (GDP) to climatic change-related failures. In contrast, the cost of arresting climate change through actions such as reducing greenhouse emissions cannot exceed 1% of the overall GDP (Stern 17). The risk of climate change is, moreover, a long-term global threat, whose damages could be more severe and on a larger scale than the two world wars. It, therefore, calls for a collective global response to the market failures that contribute to climate change.

Possible Solutions to Climate Change

From the analysis, it is evident that the causes of climate change can be both individual and national while driving to work and implementing policies respectively. As such, the solutions can be implemented at an individual and national level correspondingly. Without taking urgent actions towards getting a solution to climate change, it may end up distressing life on earth. A hundred million plus individuals, more so the poorest people in the world, will be exposed to harsh risks of diseases, floods, drought, and starvation. If the catastrophic effects of climate change are to be avoided, then there is a need to cut the degree of emitting greenhouse gases and maintain the average rise in temperature in the world below 2 ºC. Limiting the average increase in temperature in the world would not necessarily mean that the harmful effects of climate change would not be felt, but the limit will maintain the effects at a minimum. As such, there is a need to drop the emission of greenhouse gasses to fall irrevocably come next year, which will, in turn, determine the degree of devastation that future generations will face. Up till now, government politicians have not undertaken sufficient actions to avoid going above this limit. The best way to do it is to implement national targets that are legally binding and similarly hold politicians accountable for taking obligatory actions. Secondly, governments can establish voluntary schemes, which may not be effective in realizing the same objectives as compared to mandatory actions. They are normally used when resistance from the public blocks the execution of more effective and binding control actions.[3]

It is not a wise decision to risk leaving the problem of greenhouse gas emissions to voluntary schemes or actions since the issue needs targets that are legally binding to solve. Such binding, legal actions are always supported by scientific assessments and analysis and are not based on weak political ideologies and considerations.[4] Rich or developed countries, which are basically emitting high amounts of greenhouse gases and have caused this problem should be forced to lead by example in trying to alleviate the effects of climate change. By doing so, it would be a guarantee that solutions would be attained because they have the finances, infrastructure, and technical skills required to solve this problem.[5] Poorer or developing states should also make sure that their greenhouse gas emissions are eventually reduced within a worldwide agenda, but by a degree and period that explains their great need for development and limited resources.

While this can be done at a national level, there are solutions that can be implemented at an individual level. People can get informed about climate change and get involved in the process of researching on the subject by reading books, newspapers, and similarly watching films and DVDs that talk about global warming. This way they get to know the facts that surround the issue and educate the community or people around them on the various actions that can be taken to reduce the impacts of climate change. Secondly, businessmen who fly a lot to attend international conferences and business meetings can reduce their flights by making use of current innovations such as webcasting and video conferencing, thus reducing the emission of carbon dioxide by planes or jets.  Those going to work daily can consider using bicycles or walking, or merely using pooled transport for all employees to reduce the number of vehicles driven to work. Additionally, using alternative sources of energy such as solar and wind, consuming organic foods, supporting green movements, and using energy efficiency can reduce the demand for energy, thus limiting waste and general emissions. Finally, disposing of wastes appropriately can help reduce greenhouse gas emissions that are associated with landfills. Using materials that can be recycled cut down on the amount of non-biodegradable wastes. If individuals participate in such activities, there is likely to be a considerable reduction in the number of greenhouse gases emitted. However, these actions are more voluntary and may not realize much.


From the analysis, it is evident that adopting a legally binding policy would be the best approach to solve this problem. Since voluntary schemes may need a lot of cooperation from the general public, it may not be easy to implement policies that will affect them in one way or the other. As such, involving policy developers and legislators in coming up with policies that can alleviate this issue needs a forceful, yet economically viable policy to solve. Since reducing the amount of greenhouse gas emission is achievable if politicians establish and implement policies that tax those that go beyond the acceptable gas emission, it is the best approach that can be used to solve climatic change. Additionally, policies can be implemented internationally, and this would ensure the involvement of all states. Since both poor and rich countries can contribute to the process based on their capability and availability of resources, it would ensure global justice because the largest contributors to the problem would contribute more to the process. Since this situation represents a state in which oversupply occurs because the costs of pollution spill over to other members of the community who are not compensated for those losses, it qualifies to be a market failure. The current rate of climatic change is dire and warrants public policy solutions. The worst affected are the poor countries, even though, the fact that they are the least participants in climatic change causing activities. Among the measures that can be put in place to prevent climatic changes include the adoption of relevant policies. The major culprits of climate change market failures are the developed countries, which should lead to adopting policies that are geared to preventing climatic change.

Works Cited

Bachu, S., and J. J. Adams. “Sequestration of CO< sub> 2</sub> in geological media in response to climate change: capacity of deep saline aquifers to sequester CO< sub> 2</sub> in solution.” Energy Conversion and Management44.20 (2003): 3151-3175.

Berkhout, Frans, Julia Hertin, and David M. Gann. “Learning to adapt: organisational adaptation to climate change impacts.” Climatic Change 78.1 (2006): 135-156.

Hallegatte, Stéphane. “Strategies to adapt to an uncertain climate change.”Global Environmental Change 19.2 (2009): 240-247.

London School of Economics. “Why do economists describe climate change as a market failure?” Grantham Research Institute of Climate Change and Environment. 22 Nov 2013. Web. 23 Feb 2014.

Schelling, Thomas. “Greenhouse Effect.”  The Concise Encyclopedia of Economics. 2002. Web. 23 Feb 2014.

Solomon, Susan, ed. Climate change 2007-the physical science basis: Working group I contribution to the fourth assessment report of the IPCC. Vol. 4. Cambridge University Press, 2007.

Stern, Nicholas, ed. The economics of climate change: The Stern review. Cambridge University Press, 2007. Print.


[1] Solomon, Susan, ed. Climate change 2007-the physical science basis: Working group I contribution to the fourth assessment report of the IPCC. Vol. 4. Cambridge University Press, 2007.


[2] Bachu, S., and J. J. Adams. “Sequestration of CO< sub> 2</sub> in geological media in response to climate change: capacity of deep saline aquifers to sequester CO< sub> 2</sub> in solution.” Energy Conversion and Management44.20 (2003): 3151-3175.


[3] Ibid, see 1 above.

[4] Berkhout, Frans, Julia Hertin, and David M. Gann. “Learning to adapt: organisational adaptation to climate change impacts.” Climatic Change 78.1 (2006): 135-156.


[5] Ibid.