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How to Solve Global Warming

by admin on April 20, 2009

polar bear global warming How to Solve Global Warming The new catch phrase in the past few years has been “sustainability”. As we have witnessed, some things are just not sustainable.

Exponential growth in debt and credit and giving loans to people who can’t pay it back can’t last forever. The business model does not work in the long term and it creates an eventual crash. However, credit growth according to GDP growth and disposable income is more likely to work. The path is a little slower, but hey, it works and it does not take you to the beginning all over again.

This post addresses the global environment and how we must try to create a global business model for the long term. This model takes into account the fact that we must have a business model where the rate at which we are consuming the environment must be slower or equal to the rate at which the environment can replenish itself.

If the above does not hold, we’ll run into a lot problems and maybe even our own self-destruction.


pollution1 How to Solve Global Warming First, we must acknowledge that there is a consensus in the scientific world about the threats of the current destruction of the environment and global warming.

If you’re one of the skeptics on the subject, I would say that it is better to be safe than sorry. Here is a quote from Nobel Prize Winner Joseph Stiglitz on the subject from his book Making Globalization Work:

” While broad scientific consensus has emerged on global warming, there is till some uncertainty. It is true that things might not be as bad as today’s doomsayers claim; on the other hand, they may prove to be far worse. This is no different from most of life: one always has to make decisions based on imperfection information.”

So, it comes down to the fact that there is a lot of evidence that global warming is a threat, however, it may not be a 100% probability. Maybe it’s a 70% probability. My conclusion is that given the data and the chance, you’re better off doing something about it. Additionally, things such as less pollution, less deforestation, and cleaner energy is better for our lifestyles and health. It’s a win-win situation.

Fixing the problem

Summarizing, the global warming problem revolves around:

-Excessive emissions of greenhouse gases.

-Deforestation, which slows the rate at which carbon dioxide is taken out of the atmosphere.

- Overall pollution of rivers and destruction of natural habitats.

-Depletion of natural resources that could be replenished such as timber.

Overall, we are destroying the environment at the expense of unsustainable growth. Why is it not sustainable? Well, once we destroy everything, we’re toast.

What can we do about it?

First, environmental protection and global warming are global problems. As a result, the solution must be applied worldwide. You can tackle the problem by two channels (some of this has been partially implemented in some places):

1) Regulation in forms of emission limits, bans on deforestation, and other types of direct controls at a global level.

2) Regulation through different forms of incentives. This can include taxes on emissions (e.g. cap and trade) and tax credits for companies that are environmentally friendly (using cleaner machines, technology, etc).

* In order for countries to enforce the policy, trade sanctions would be imposed if the policy is not adopted.

And you may ask, why should we tax emissions or anything like that?

Well, we are trying to make up for a market failure. In a well functioning market, all costs are taken into account. However, companies do not incur the cost of their negative externality on the environment. Therefore, as with other market failures such as monopolization, it is up to the state to intervene and align public and private interests.


In general, we need to find a path for global growth that is sustainable. We need to find a way to raise our living standards without destroying our own habitat through either regulation or tax incentives.

And I’ll leave you with this GREAT quote from Jared Diamond’s best-seller “Collapse”:

“Out world society is presently on a non-sustainable course…Because we are rapidly advancing along this non-sustainable course, the world’s environmental problems will get resolved, in one way or another, within the lifetimes of the children and young adults alive today. The only question is whether they will become resolved in pleasant ways of our own choice, or in unpleasant ways not of our choice, such as warfare, genocide, starvation, disease epidemics, and collapses of societies. While all of those grim phenomena have been endemic to humanity throughout our history, their frequency increases with environmental degradation, population pressure, and the resulting poverty and political instability”

Technorati Tags: Economic Policy, environmental policy, global warming, pollution

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