Assignment: Market Failure Research Paper
Climate Change: Externalities and Market Failure
Everyone is the world depends on how the climate will affect their daily lives. People more often than not plan their day around the weatherman’s forecast, and tends to have a specific routine on how to deal with what’s being said. Although the weatherman can predict the weather and have a slight view into the future, no one indeed can see the future clearly and predict future events related to climate change. Society has seen many natural disaster throughout the world. Some examples include: Typhoon Haiyan in the Philippines, Tohoku earthquake and tsunami in Japan, and Hurricane Katrina in the United States. Millions of lives were lost those years. Not alone, thousands businesses and millions of jobs, affecting the economic growth for each country.
Regarding climate change to the economy go hand-by-hand. For most business having a good year is define on how well did the climate cooperated to help them grow their raw material for production. Some other business rely on services alone and might not be too worry about climate change in order to stay in business, though by not having that raw material, some of those business might not even be possible. This help can make it possible to produce those raw materials needed to produce the wood for the infrastructure of the building, the tools needed to provide quality service, and even to have electricity or clean water. Thus, not being able to operate their business at all.
Every year, without the proper information on how a specific business affect climate change, the markets all around the world fail. Climate change can be consider as an externality. An externality is “when our actions (regarding economics) impact on those not directly involved.” The government in the United States and federal regularity agencies such as Environmental Protection Agency...