Market failureIn neoclassical economics, market failure is a situation in which the allocation of goods and services by a free market is not Pareto efficient, often leading to a net loss of economic value. Market failures can be viewed as scenarios where individuals' pursuit of pure self-interest leads to results that are not efficient – that can be improved upon from the societal point of view. The first known use of the term by economists was in 1958, but the concept has been traced back to the Victorian philosopher Henry Sidgwick.
Government failureGovernment failure, in the context of public economics, is an economic inefficiency caused by a government intervention, if the inefficiency would not exist in a true free market. The costs of the government intervention are greater than the benefits provided. It can be viewed in contrast to a market failure, which is an economic inefficiency that results from the free market itself, and can potentially be corrected through government regulation. However, Government failure often arises from an attempt to solve market failure.
Market (economics)In economics, a market is a composition of systems, institutions, procedures, social relations or infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services (including labour power) to buyers in exchange for money. It can be said that a market is the process by which the prices of goods and services are established. Markets facilitate trade and enable the distribution and allocation of resources in a society.
Environmental issuesEnvironmental issues are disruptions in the usual function of ecosystems. Further, these issues can be caused by humans (human impact on the environment) or they can be natural. These issues are considered serious when the ecosystem cannot recover in the present situation, and catastrophic if the ecosystem is projected to certainly collapse. Environmental protection is the practice of protecting the natural environment on the individual, organizational or governmental levels, for the benefit of both the environment and humans.
Environmental protectionEnvironmental protection is the practice of protecting the natural environment by individuals, groups and governments. Its objectives are to conserve natural resources and the existing natural environment and, where it is possible, to repair damage and reverse trends. Due to the pressures of overconsumption, population growth and technology, the biophysical environment is being degraded, sometimes permanently. This has been recognized, and governments have begun placing restraints on activities that cause environmental degradation.
Free marketIn economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any other external authority. Proponents of the free market as a normative ideal contrast it with a regulated market, in which a government intervenes in supply and demand by means of various methods such as taxes or regulations.
Environmental policyEnvironmental policy is the commitment of an organization or government to the laws, regulations, and other policy mechanisms concerning environmental issues. These issues generally include air and water pollution, waste management, ecosystem management, maintenance of biodiversity, the management of natural resources, wildlife and endangered species. For example, concerning environmental policy, the implementation of an eco-energy-oriented policy at a global level to address the issues of global warming and climate changes could be addressed.
Environmental justiceEnvironmental justice or eco-justice, is a social movement to address environmental injustice, which occurs when poor and marginalized communities are harmed by hazardous waste, resource extraction, and other land uses from which they do not benefit. The movement has generated hundreds of studies showing that exposure to environmental harm is inequitably distributed. The movement began in the United States in the 1980s. It was heavily influenced by the American civil rights movement and focused on environmental racism within rich countries.
Environmental economicsEnvironmental economics is a sub-field of economics concerned with environmental issues. It has become a widely studied subject due to growing environmental concerns in the twenty-first century. Environmental economics "undertakes theoretical or empirical studies of the economic effects of national or local environmental policies around the world. ... Particular issues include the costs and benefits of alternative environmental policies to deal with air pollution, water quality, toxic substances, solid waste, and global warming.
PriceA price is the (usually not negative) quantity of payment or compensation expected, required, or given by one party to another in return for goods or services. In some situations, the price of production has a different name. If the product is a "good" in the commercial exchange, the payment for this product will likely be called its "price". However, if the product is "service", there will be other possible names for this product's name.
Price discriminationPrice discrimination is a microeconomic pricing strategy where identical or largely similar goods or services are sold at different prices by the same provider in different market segments. Price discrimination is distinguished from product differentiation by the more substantial difference in production cost for the differently priced products involved in the latter strategy. Price differentiation essentially relies on the variation in the customers' willingness to pay and in the elasticity of their demand.
Greenhouse gas emissionsGreenhouse gas emissions (abbreviated as GHG emissions) from human activities strengthen the greenhouse effect, contributing to climate change. Carbon dioxide (), from burning fossil fuels such as coal, oil, and natural gas, is one of the most important factors in causing climate change. The largest emitters are China followed by the US, although the United States has higher emissions per capita. The main producers fueling the emissions globally are large oil and gas companies.
Carbon emission tradingEmission trading (ETS) for carbon dioxide (CO2) and other greenhouse gases (GHG) is a form of carbon pricing; also known as cap and trade (CAT) or carbon pricing. It is an approach to limit climate change by creating a market with limited allowances for emissions. This can lower competitiveness of fossil fuels and accelerate investments into low carbon sources of energy such as wind power and photovoltaics. Fossil fuels are the main driver for climate change. They account for 89% of all CO2 emissions and 68% of all GHG emissions.
Climate changeIn common usage, climate change describes global warming—the ongoing increase in global average temperature—and its effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes to Earth's climate. The current rise in global average temperature is more rapid than previous changes, and is primarily caused by humans burning fossil fuels. Fossil fuel use, deforestation, and some agricultural and industrial practices increase greenhouse gases, notably carbon dioxide and methane.
Renewable energyRenewable energy is energy from renewable resources that are naturally replenished on a human timescale. Renewable resources include sunlight, wind, the movement of water, and geothermal heat. Although most renewable energy sources are sustainable, some are not. For example, some biomass sources are considered unsustainable at current rates of exploitation. Renewable energy is often used for electricity generation, heating and cooling.
Climate change mitigationClimate change mitigation is action to limit climate change by reducing emissions of greenhouse gases or removing those gases from the atmosphere. The recent rise in global average temperature is mostly due to emissions from burning fossil fuels such as coal, oil, and natural gas. Mitigation can reduce emissions by transitioning to sustainable energy sources, conserving energy, and increasing efficiency. It is possible to remove carbon dioxide () from the atmosphere by enlarging forests, restoring wetlands and using other natural and technical processes.
Carbon taxA carbon tax is a tax levied on the carbon emissions required to produce goods and services. Carbon taxes are intended to make visible the "hidden" social costs of carbon emissions, which are otherwise felt only in indirect ways like more severe weather events. In this way, they are designed to reduce greenhouse gas emissions by increasing prices of the fossil fuels that emit them when burned. This both decreases demand for goods and services that produce high emissions and incentivizes making them less carbon-intensive.
Kyoto ProtocolThe Kyoto Protocol was an international treaty which extended the 1992 United Nations Framework Convention on Climate Change (UNFCCC) that commits state parties to reduce greenhouse gas emissions, based on the scientific consensus that global warming is occurring and that human-made CO2 emissions are driving it. The Kyoto Protocol was adopted in Kyoto, Japan, on 11 December 1997 and entered into force on 16 February 2005. There were 192 parties (Canada withdrew from the protocol, effective December 2012) to the Protocol in 2020.
Carbon priceCarbon pricing (or pricing) is a method for nations to address climate change. The cost is applied to greenhouse gas emissions in order to encourage polluters to reduce the combustion of coal, oil and gas – the main driver of climate change. The method is widely agreed and considered to be efficient. Carbon pricing seeks to address the economic problem that emissions of and other greenhouse gases (GHG) are a negative externality – a detrimental product that is not charged for by any market.
Marginal costIn economics, the marginal cost is the change in the total cost that arises when the quantity produced is incremented, the cost of producing additional quantity. In some contexts, it refers to an increment of one unit of output, and in others it refers to the rate of change of total cost as output is increased by an infinitesimal amount. As Figure 1 shows, the marginal cost is measured in dollars per unit, whereas total cost is in dollars, and the marginal cost is the slope of the total cost, the rate at which it increases with output.
