xid-10266232_2 - Tues, Nov 29 1. Global warming: What are...

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Tues, Nov 29 1. Global warming: What are some economic considerations? Reduction of greenhouse gases - a public good - Nonexcludable, nonrival So it can't be efficiently produced by private sector; Difficulty of eliciting true willingness to pay, can't prevent non-payers from benefiting; impossible to collect revenues from all users. since it is a global problem, requires some cooperation between countries… Treaties and agreements: 1992 'Earth Summit' - attempt to voluntarily stabilize greenhouse gas emissions 1997 - Kyoto Agreement - reduce 1990 emissions by 5% by 2010, ratified by Western European countries, Japan, Canada - not US. A public good results in: Free rider problem - no way to exclude those who don't contribute to provision of reductions of greenhouses Reduction of greenhouse gases as a global public good US has 5% of world population, emits about 20% of GHG gases - also produces about 20% of the world's GDP Difficulty in monitoring and enforcement. What must an agreement contain?
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xid-10266232_2 - Tues, Nov 29 1. Global warming: What are...

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