The Case for Government Involvement in Pollution Issues

New research published in Climate Risk Management journal showed that increases in the global temperature over the past 60 years are 99.999% sure to be caused by human activity. This news shows that the government needs to take on a bigger role when it comes to tackling pollution. The United States decided to back out of the Kyoto Treaty and gravitated towards a free market approach, which did not even come close to meeting the standards set in Kyoto. It is clear that Conservative and Austrian perspectives will have a difficult time in reducing pollution because they believe there is no room for the government to get involved in private affairs. Without the government setting ceilings for the amount of pollution allowed, the free market would have difficulty in finding some sort of standard at which to stop polluting. If there is demand they will supply the good regardless of pollution because businesses are looking for profit and nothing else. The government can handle this using a cap and trade system. Cap and trade is a market friendly solution because it provides incentives for businesses to alter the way they produce or move to developing cleaner energy. Cap and trade caps how much pollution should be emitted then it issues permits to businesses to expel a certain amount of pollution. Businesses who do not need the permits because they have found other ways to produce their product or moved to cleaner energy can trade their permits to businesses who are a little behind the curve and need to pollute more than their permits allow. This will keep pollution under the socially optimal level. Now that we are almost 100% sure that recent global warming has been caused by humans, it is clear that the free market has not lead us to the socially desirable outcome when it comes it pollution. Firms and people are over polluting and it looks as if there is no end in sight. It is time the government had a fair chance to try its hand in curtailing pollution. 

Source:

Philip Kokic, Steven Crimp, Mark Howden, A probabilistic analysis of human influence on recent record global mean temperature changes, Climate Risk Management, Volume 3, 2014, Pages 1-12, ISSN 2212-0963, http://dx.doi.org/10.1016/j.crm.2014.03.002.