In three dot points explain the rationale for the government’s intervention to mitigate climate change?

In three dot points explain the rationale for the government’s intervention to
mitigate climate change?

Question
TUTORIAL 2
CLIMATE CHANGE ECONOMICS AND POLICY
Read:
The lecture slides, required readings and revision questions in Module 2.

Reflect:

In module 2 the economics of climate change and policy is introduced. In week 4,
economic theory relating to externalities and public goods is introduced. It is argued
that GHG emissions are an externality in the production and consumption of fossil
fuels and that GHG mitigation has the characteristics of a public good. In week 5,
BCA of climate change is introduced, including the potential risks and uncertainty. In
week 6, the policies of mitigation and adaptation are introduced.

Respond:

Use the readings and lecture notes for assistance. (Submit the tutorial to the dropbox
by the due date)
1.

Why is the mitigation of GHG’s characterised as a public good and what is the
main implication of this?

2.

Assume you are the principal advisor of the Minister for the Environment. The
Minister has an upcoming media interview about a proposed carbon tax and
would like precise and concise answers for the following potential topics.

(a) In three dot points explain the rationale for the government’s intervention to
mitigate climate change?

(b) In three dot points explain why a carbon tax is the preferred policy?

ECO3CCE

Page 1

TUTORIAL 2
3.

Write a one paragraph response to the following question. “Why do most
economists put their trust in ‘market-based’ solutions as opposed to direct
government interventions (so called command and control approaches) to
mitigate GHGs?”

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