There are a great many problems, which bother all countries, and the problem of climate change is not an exception. Being aware of climate change, the countries try to provide some international activities, in order to slow the process or to stop it at all. The international interest in the problem is understood as to combat such a huge problem alone is impossible, and only the cooperation of all countries will help to save the planet from disaster. Considering climate change, its impact on the economic processes may not be avoided as these concepts are connected with each other significantly and remain in the reciprocal relation and influence.
Answering the question how can climate change influence the economies of the countries, the very country’s economy and the level of people’s life should be considered. The Kyoto Protocol is the main document, which regulates international relations of different countries and provides the guide for action of these countries in relation of the climate change. Considering climate change as a market failure, one of the concepts of the theory may be introduced that “the lack of the quantified commitments for developing countries makes the protocol ineffective” (Grubb 2000, p.112). Providing the Kyoto Protocol, the countries developed the scheme, which had to be used, the techniques and methods, with which the aim of reducing the greenhouse effect had to be reached and the slowing of the warming of the climate achieved. The inability to reach the desired aim is the failure, which is caused by the inability of the countries to develop its economic strength, the inability to provide the manufacturing affairs in such a way that the reduction of the emission gases could be provided.
Being more specific, the following items are going to be discussed, the countries, which signed under the Kyoto Protocol, had to organize the manufacturing processes, to establish the policies and measurement that will control the emission of the greenhouse gases, the effective usage of the energy in the combination of the use of the renewable forms of energy, which reduce the pollution of the environment. Moreover, the shift to the market economy of the countries had to be provided with the aim of easier control of implementation of the environment protection policies, established by the country (UNFCCC 1997). Modern world economic relations are usually provided on the free basis and the inability to establish market relations is a failure, which influenced not just the economic affairs in the countries, but also the inability to provide the environmental protection policies and the establishing of the control over them.
Economic theory suggests that there are certain circumstances in which governments do not need to intervene to correct the market failures, which were discussed above. Market relations are the relations, which are based on the supply demand influence and the government interference in the process will just spoil the economic relations in the country. To the point, the deplorable results of the government to the market relations were observed in the monarchy regimes, when the economic relations in the country were poor. The regulation control in the market may be provided without the government interference, and may be based on the voluntary approaches (Putte 2007, p.36). Taking the example of the control of the climate change without government interference is the social understanding that climate is in danger, and the people’s choice of the company’s products, which care about the environment. The supportive argument to the question is the appearance of the advertizing campaigns, which inform society about the environmental direction of the manufacturing of the company. Moreover, the use of the innovative technologies in the production increases the profit with the reduction of costs.
To correct the market failure in the climate change policies without government interference is possible with the implementation of the following techniques, the first of which is to reduce the demand for emissions-intensive goods and services. The step is already provided to achieve such goal, and being aware of the climate risks, the society has made their choice in the favor of the more safe products, and the reduction of demand leads to the reduction of supply and in the future to the shift on the less harmful type of production. The other way to reduce emission and to save costs, which is to increase the profit, is to increase efficiency by implementing different innovative techniques in the manufacturing. Understanding the advantages, most of the companies provide the reformation of the manufacturing in order to meet the new demands. Avoiding deforestation in the manufacturing sector, which is directed on non-emission production and reduces the costs of the companies in the nearest future. Switching to lower-carbon technologies for power, the heat and transport in particular, is the other measure, which should be provided by the company rulers (Stern 2006). The decisions, which are enumerated above, may be implemented without government interference, as most companies begin to understand the future profitability of the applied techniques.
The Kyoto Protocol was one the first attempts to organize the international combat with climate warming and to provide the international techniques in the spheres. The history of the Kyoto Protocol suggests that the international coordination necessary for slowing climate change is very difficult to achieve. The difficulty to provide international cooperation in most cases lies in the fact that countries are unable to organize the environmental protection policies in their countries, and to create some universal conventions, where the laws and the peculiarities of different countries could be taken into account, is rather complicated affair.
Filho (2009) states that the problem of climate is the universal issue and that people all over the world face the same problems, which are the conclusions of the climate change, but the understanding of the climate change is different, so the various conclusions are provided and the complications appeared during the Kyoto Protocol implementation. The first problem, as it was mentioned is the difference in the climate change understanding and the perception of the rate of risks, which are provided by it. The differences in perception make it difficult to organize the common conclusion about the necessary actions, directed to the problem solution. Considering the examples of the measures, which should be provided by the countries and which were implemented in the Article 1 of the Kyoto Protocol, the different countries policies and laws in the chosen direction may create the differences in the perception of the Protocol and the very further work, which may be restricted by the national policies and laws. Being aware of the discussed complications, one of the points in the protocol is that the measures and improvements should be provided “in accordance with its national circumstances” (UNFCC 1997).
The difficulties are numerous, and the consequences may be considered form the example of the US decision to withdraw from the Protocol in 2003. The consequences are controversial, as on the one hand, the USA withdrawal could not influence the target of aggregated emission, but the substantial drop of the carbon permit price was expected, that could crate the shake of the world economy in general. The advantages could be gained by Russia and Ukraine, who were able to rise the prices according to their desire with the deletion of the USA from the field. The reorganization in the mentioned way could not be successful for the climate in general and for every country in particular (Persson & Azar 2003).
The Kyoto Protocol, which was implemented in 1997, was a huge step on the way to combating the climate change, but from the perspective of the time, more than ten years has passed form the time of its adoption, a great many of changes has occurred in the world, and the new possibilities have appeared for the improved methods of planet safe. First of all, the possibilities of climate change should be implemented not as a burden, but as the opportunity for further business and manufacturing development, “as a path to a new kind of prosperity” (UNEP 2008).
The meeting on December, 2009 in Copenhagen will gather for about 180 countries with the aim to improve the concepts, which are represented in the existing Kyoto Protocol (Special to E&E 2009). As it was admitted some years ago, the USA has the plan for improvements in the climate change sphere, which include “rules for accounting of “sinks” that absorb CO2, and for the operation of the clean development mechanism, which allows industrialized countries to offset part of their commitments against emission savings arising from emission-reducing investments in projects within developing countries” (Grubb 2000, p. 111).
The new instructions should be provided in the question of the methane collection in the seabed and in arctic permafrost, as not a word is said about it in the Kyoto Protocol. The improvements of the methane usage may be offered, as methane is the stockpile of clean-burning fuel (European climate change programme 2001). Fuel switching on CO2 emissions should be discussed as “the role of the renewable energy” (Capros, Kouvaritakis & Mantzon 2001, p.77)
In conclusion, the problem of climate change bothers the whole world, and the economic sphere is in higher danger, as the warming climate affects the life and the work of people, that in turn, affects the market and the manufacturing in general. The Kyoto Protocol is the main document, which tried to gather the attempts of the whole world and to combat the climate change, but he document needs the further development, which is going to be provided on December, 2009, when for about 180 countries are going to give their offers about improving the Kyoto Protocol, as the technological process does not stay on the same place and for more than ten years the conditions were improved. Moreover, the financial crisis, the swine flu and other social disasters have influenced the economies of the countries and the problem of environment protection was reduced on the background.
Capros, P, Kouvaritakis, N & Mantzon, L 2001, Economic Evaluation of Sectoral Emission Reduction Objectives for Climate Change. Top-down Analysis of Greenhouse Gas Emission Reduction Possibilities in the EU, National Technical University of Athens.
European climate change programme: report 2001. Web.
Filho, WL 2009, ‘Communicating climate change: challenges ahead and action needed’, International Journal of Climate Change Strategies and Management, vol. 1, no. 1, pp/ 6-18.
Grubb, M 2000, ‘Economic dimensions of technological and global responses to the Kyoto protocol’, Journal of Economic Studies, vol. 27, no. ½, pp. 111-125.
Persson, TA & Azar, C 2003, ‘The cost of meeting the Kyoto Protocol. Dealing with the carbon surplus in Russia and the Ukraine’, Management of Environmental Quality: An International Journal, vol. 14, no. 4, pp. 488-507.
Putte, I 2007, ‘Monitoring climate change’. AWE International, pp. 31-37.
Special to E&E 2009, A Rosy View on Climate Talks Persists in Copenhagen – ‘A Lot Can Be Achieved’, The New York Times, 3. A4.
Stern, N 2006, The Economics of Climate Change. Web.
UNEP discusses breaking down barriers to a green economy in new Yearbook, 2008, Management of Environmental Quality: An International Journal, vol. 19, iss. 5.