Class 05 Homework: Chapter 5 key questions

 What are the main challenges a) for the individual and b) for the society
regarding climate protection?
Society is too broad a term. This is because it comprises individuals and groups
with different perspectives and opportunities regarding climate protection. The
same applies to nation states, therefore, we must distinguish between the various
levels in order to find entry points that could lead to action.
We will now consider the question of what climate protection can actually mean.
This question can be answered at different levels. I will start at the level for the
individual, because we assume that anyone can contribute to climate protection.
A climate activist once told me, the good news is that every single one of us can
opt for climate protection up to 200 times a day. As a social scientist I must say
that this is a mixed message. Because what it actually means is that it is
permanently overwhelming for the individual. Especially for people who are very
strongly committed to climate protection. It is frequently very difficult to decide
and often we don’t even know whether it’s of any use.
The problem of individual climate protection in the Global South in megacities and
of a member of the middle class in a wealthy society is very different. In Hamburg,
a person can just ride my bike to work. If an individual in Mexico-city or Cairo or
New Delhi wants to try to reach their workplace while protecting the climate, they
are faced with a completely different problem. There it is about the options that are
at all available, to get from A to B safely on time and reasonably hassle-free.
Although these are different reasons, it still shows that individuals are
systematically too overwhelmed to make significant contribution to climate
protection. In addition to their daily struggle with daily life in a megacity.
These are the various approaches a government could use to actually promote
climate protection: The first is a pedagogical approach, attempting to get as many
people as possible to change their lifestyle either by appealing to their morals or
through information. The second approach is to actually provide the
infrastructure. This is usually the government’s responsibility. Because it is very
difficult to develop infrastructures though individual initiatives. The third approach
generally comprises establishing a legal framework, setting up subsidy programs
and so on. And from a social science perspective, the trick is to incorporate climate
protection as much as possible in our daily routines or in the existing
infrastructures in order not to have to make choices anew on a daily basis.
I have now taken you from the level of the individual to the level of politics and
national government. If we now together go to another level, namely that of global
climate policy, we see even greater differences in this system between the various
nation states. You see very large discrepancies in terms of political systems. You
see discrepancies in terms of the economic possibilities of climate protection. But
you also see discrepancies in terms of vulnerability to the impacts of climate
change. It is precisely the discrepancies in the vulnerability to the impacts of
climate change that make me restate the importance of climate change for life in
our society. It is not only about the possibilities of climate protection, that is, how
we produce less CO2 in the long- term, it’s also largely about how we can protect
ourselves from the negative impacts of climate change. That is, about climate
change adaptation.

 What are the three main arguments for a 2° temperature

target?
The Paris agreement entered into force in November 2016. One year after the
sensational success in Paris, all states have already committed to limiting global
warming to well below 2 degrees Celsius. But why specifically 2 degrees or even
less?
International climate policy is pursuing the political objective of limiting the global
average temperature increase to less than 2 degrees Celsius. In my opinion, the 2-
degree limit is derived from the fusion of three different rationales: The first is
based on the fact that we will experience damage due to the impacts of climate
change even if we stay below 2 degrees. This damage will increase with increasing
temperatures in a non-linear manner. That is, damage and temperature increase are
not always proportional to one another. The impacts of climate change and the
ensuing risks and damages increase if the global average temperature also
increases, as shown in the burning embers diagram here. We should expect severe
damage with a temperature increase of only 2 degrees Celsius compared to the pre-
industrial state. This is something we already know. But we shouldn’t assume that
we have fully understood the connection between temperature increase and the
ensuing damage.
The second rationale is based on the fact that we would be better off by taking
precautions if we did not fully comprehend the system. We are adopting a kind of
precautionary principle with a two-degree limit. In such a complex system as the
Earth’s system, it is impossible to predict all the impacts of global warming.
However, the unpredictability of the impacts increases the further we distance
ourselves from the natural state of the past 10000 years.
In addition to the damage that we can already roughly estimate today, as illustrated
in the burning ember diagram, the risk of further still inconceivable impacts
ensuing from a temperature increase of above 2 degrees Celsius rises
exponentially. If we follow the line of thought that we do not fully understand the
impacts of global warming, that await us, but we still want to protect ourselves
from the unknown, then this means that we as a society are implementing a
precautionary principle to avoid a temperature increase of 2 degrees Celsius.
I believe that the third rationale is that political processes and political consulting
require simple evidence that is easy to communicate. A highly composite
aggregate. The third rationale is that we want a very concise result in order to enter
into political negotiations. In other words, we would like to define a clear target
temperature, preferably a number that is also easy to remember. Two degrees
Celsius is memorable.

 What are the main results of the UNFCCC Paris Agreement

(2015)?
2015
Landmark Paris Agreement Reached
One hundred ninety-six countries agree to what experts call the most significant
global climate agreement in history, known as the Paris Agreement. Unlike past
accords, it requires nearly all countries—both developed and developing—to set
emissions reduction goals. However, countries can choose their own targets and
there are no enforcement mechanisms to ensure they meet them. Under the
agreement, countries are supposed to submit targets known as nationally
determined contributions. The mission of the Paris Agreement, which enters into
force in November 2016, is to keep global temperature rise below 2°C and pursue
efforts to keep it below 1.5°C. But analysts urge more action to achieve this goal.
In 2017, President Donald J. Trump withdraws the United States from the
agreement, saying that it imposes “draconian financial and economic burdens” on
the country.

The Paris Agreement in 2015 was such a great success because the climate change
conference agreed to the goal of limiting global warming to a maximum of 2
degrees. The agreement entered into force in record time only one year later,
making this goal binding under international law. However, the implementation
still presents a number of challenges. Since adopting a goal is far from agreeing on
how to implement it, on how everyone has to and wants to contribute to achieving
that goal in the future. So, there is still a gap between the goals and the
implementation.
Most participants and observes consider the results of the COP at the end of 2015 a
success. A binding agreement for the goals has actually been made. Global
warming should remain well below 2 degrees Celsius and preferably below 1.5
degrees, compared to pre-industrial levels. The inclusion of preferably 1.5 degrees
Celsius was unexpected for many, as 2 degrees was usually previously discussed.
Of course, this is more ambitious and has not yet been implemented successfully.
Apart from these goals, some fundamental principles also changed in Paris.
Emerging economies and developing countries are now ready to contribute to
climate protection rather than to exclusively hold the industrialized countries
responsible. Generally, we no longer depend exclusively on the global negotiation
framework that practically dictates climate protection from the top down. Rather,
we are also recognizing the value of bottom-up developments, for example,
regional climate protection agreements. This should all work through the adoption
and regular development of nationally determined contributions, NDCs, where
countries determine their own contribution.

Class 06 homework: key questions

  Why do Greenhouse Gas emissions lead to a market failure?
Releasing greenhouse gases into the atmosphere by human activities can be
interpreted as a negative externality leading to a market imperfection or market
failure in the allocation of resources. Negative externalities occur when production
and/or consumption impose external cost on third parties outside of the market
with no appropriate compensation is paid. Externalities create spillovers.
The key thing is to make a distinction between the private costs and benefits to the
individual consumer and producer and the social costs and benefits to society as a
whole.
If there are negative externalities, then the marginal social cost curve lies above the
marginal private cost curve, because we’re adding in some external costs. Notice in
the diagram, that if the MSC curve pivots away from MPC, then we’re assuming
that the marginal external cot of the extra output is getting bigger. The difference
between the two curves is the external cost associated with producing output Q1.
If the market doesn’t take into account the externalities, this can lead to market
failure. Ideally, what we would like is to have a different output Q2, which is less
than Q1. So, in the absence of intervention, free-market will tend to overprovide or
overconsume goods and services whether negative externalities. ( P2, Q2) takes
into account the negative externalities and therefore, that’s a social optimum level
of output.
The equilibrium delivered by the free market is at Q1-we’re not making the best
use of our scarce resources, because of the externalities.
Let’s talk about the deadweight loss of welfare as a result of market failure. The
triangle area is social welfare loss because Q1- the market output supplied, is
higher that Q2-the social optimum. And if you go beyond Q2, the marginal social
cost is greater than the marginal private benefit. So, we’re losing some welfare.

 Which different options exist to correct the market failure?

To what extent should we make the polluter pay? Should we adopt the polluter
pays principle when we come across negative externalities in production and
consumption?
British Columbia in Canada uses a carbon tax; China has raised smoking taxes on
consumers; there’s congestion charge for New Delhi and London, which can be a
polluter pays tax and environment tax. As an alternative we have the emissions
trading scheme in the European Union. Some people argue that we should replace
that with a carbon tax.
A pollution tax on the supplier (for example, a carbon tax on an airline) increases
the marginal private costs to MPC2. The scale of a tax is shown by the vertical
distance between there two cost curves. In theory, that should lift the private cost
or production and should cause a contraction of demand to Q2and help to correct
for the market failure.
The tax generates revenue, which might be ear-market for special projects.