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ENVIRONMENTAL ECONOMIC (ECO646)
Solution to EnvironmentalExternalities
҉�Public good model and theory of externalities illustrate how pollution is
the result of market failures҉�Failures: absence of property rights
(no one own the atmosphere, no incentive to correct/ prevent
contamination of these resources)҉�Coase theorem work only under
certain limiting conditions
Conventional Solutions:
Command-and-control Approach
Economics Solution: The
Market Approach
Moral Suasion Approach
Ambient Standard
Technology-based
StandardPerformance-
based Standard
Subsidies
Deposit/Refund System
Pollution charge
Pollution Permit Trading System
Advertisement
Article
Campaign
1. Conventional solution:
command-and-control approach
ARTICLE 1: FINLAND TIMES
ISSUE: ENVIRONMENTAL FRIENDLY BUS STARTS JOURNEY IN HELSINKI TODAY
(TECHNOLOGY BASED STANDARD)
Solution: The Helsinki Transport Authority (HSL) is going to introduce bus service in the city run
by Ethanol Diesel.
ARTICLE 2:INTERNATIONAL BUSINESS TIMES
ISSUE: FUKUSHIMA RADIATION NOW A GLOBAL DISASTER; JAPAN FINALLY ASK WORLD FOR HELP,
TWO YEARS TOO LATE
(TECHNOLOGY-BASED STANDARD)
• SOLUTION: 1- Japan government approve plan to bury refrigeration pipes 100 feet below sea level for about a mile around the radioactive
site to freeze the ground to prevent water flow.
• 2- accept the help from France, which will help decommission and dismantle the crippled nuclear reactors at Fukushima
(outside aid)
ARTICLE 3: ENVIROCIVIL.COM
ISSUE: CARBON EMISSION, CLIMATE CHANGE
(TECHNOLOGY BASED STANDARD)
Solution: improve the public transportation system by introduced of electric vehicle
ARTICLE 4 :THE NEWS STRAITS TIMES
ISSUE: LESSON FROM CHINA TO REDUCE AIR POLLUTION
(TECHNOLOGY BASED STANDARD)
Solution: 1-Beijing Transportation Commission announced a green public transportation
2- Petrol stations in Beijing are located along the outer ring roads, making it less convenient to
pump petrol
ARTICLE 5: THE STAR
ISSUE: SYSTEM WILL IMPROVE WATER QUALITY AND OVERCOME POLLUTION
(TECHNOLOGY BASED STANDARD)
Solution : Centralized wastewater management system, will provide residents here with a modern
sewerage facility enjoyed by urban folk in other major cities in the world.
ARTICLE 6: NEWS STRAITS TIMES
ISSUE: TO LEAD THE NATION'S MOVE TOWARDS GREEN TECHNOLOGY AND REDUCE POLLUTION
(TECHNOLOGY BASED STANDARD)
Solution: Operating five electric buses and this would be followed by the other private bus
operators in the state.
ARTICLE 7: NEWS STRAIT TIMES
ISSUE: WE'RE GOING TO SMOKE UP, CHOKE UP AND BURN UP THIS PLANET SO MUCH FASTER
(PERFORMANCE BASED STANDARD)
Solution: Can use any fuel and technology preferred to generate electricity as long as the total amount of air pollutants and greenhouse
gases emitted meet the standards for cleaner air and fewer greenhouse gases.
ARTICLE 8: NEWS STRAITS TIMES
ISSUE: TO REDUCE THE COUNTRY’S CARBON EMISSIONS BY 40 PER CENT BY THE YEAR 2020.
(PERFORMANCE BASED STANDARD)
Solutions: Companies whose products are listed in the Green Directory must contribute to
environmental sustainability in some way: saving water, or minimizing waste, for example.
ARTICLE 9: NEWS STRAIT TIMES
ISSUE: MALAYSIA COMMITTED IN ADDRESSING HAZE
(POLLUTION REDUCTION SUBSIDY)
Solution: Malaysia government has offered ‘cloud seeding service’ to Indonesia
chemical either silver iodide or dry ice being dumped onto the cloud by
plane or rocket
chemical either silver iodide or dry ice being dumped onto the cloud by
plane or rocket
Cloud which then becomeain
shower
Cloud which then becomeain
shower
12
3
ARTICLE 10: BUSINESS TIMES
ISSUE: COUNTER CRITICISM ITS TROPICAL OIL SUPPLY HARMS THE ENVIRONMENT.
(AMBIENT STANDARD)
Solution: The Malaysian Sustainable Palm Oil (MSPO), which will be used as the national
standard from 2014 onwards, will outline criteria that industry players need to meet before their
products can be certified as "sustainable".
ARTICLE 1: THE STAR
ISSUE: MANY CASHING IN ON BUSINESS OF RECYCLING USED COOKING OIL.
(DEPOSIT REFUND SYSTEM)
Solution: KBSB (Kris Biofuels Sdn Bhd) collaborates with several local authorities collects
used cooking oil from shops, restaurants and hotels to produce biodiesel.
ARTICLE 2: THE STAR
ISSUE: COUNT YOUR CARBON EMISSION
(EMISSION CHARGE)
Solution: Government has set standard of emission.
MAS My carbon : Encourage companies to audit their activities.
ARTICLE 3: NEW STRAIT TIMES
ISSUE: RELEASING EFFLUENTS INTO THE DRAINAGE BEYOND THE PERMITTED LEVEL.
(EMISSION CHARGE)
Solution: A company manufacturing food products had a RM20,000 fined which was imposed by the lower court increased to RM100,000 by the High Court yesterday for flouting environmental laws.
ARTICLE 4: FINLAND TIMES
ISSUE: CHINA’S PERMIT-BASED EMISSIONS TRADING TO CUT DOWN ON MAJOR
POLLUTANTS
(PERMIT-TRADING SYSTEM)
Solution: China is ready to adopt a nationwide permit-based pollutant emission trading scheme
as a key part of its drive to increase energy efficiency and reduce pollution.
ARTICLE 5: FINLAND TIMES
ISSUE: CALIFORNIA'S CAP-AND-TRADE SYSTEM TO LAUNCH WITH FIRST POLLUTION PERMITS AUCTION.
(PERMIT-TRADING SYSTEM)
Solution: California's largest greenhouse gas emitters will begin buying permits in a landmark "cap-and-
trade" system designed to control emissions of heat-trapping gases and to spur investment in clean
technologies
ARTICLE 6: THE STAR
ISSUE: GLOBAL WARMING AND CLIMATE CHANGE
(SUBSIDY)
Solution: promoting use of hybrid cars by giving a huge subsidy to people; increase
purchasing power of people to buy hybrid car
MORAL SUASION APPROACH
ARTICLE 1: ENVIROCIVIL.COM
ISSUE: GLOBAL WARMING AND CLIMATE CHANGE
Solution: promoting recycling and reuse the material by using different type of bags in their
house where they can put recycle waste material
ARTICLE 2: THE STAR
ISSUE: CAMPAIGN AWARENESS ON LITTERING
Solution: 3Rs Awareness Programmes.Involve schoolchildren and advocate the 3R
principles of reduce, reuse and recycle.
ARTICLE 3: NEW STRAIT TIMES
ISSUE: EARTH HOUR; LESSON BEHIND SWITCHING OFF LIGHT
Solution: Unnecessary Lights Were Switched Off For An Hour
ARTICLE 4: THE STAR
ISSUE : POLLUTION-MAPPING TO BE COMPLETE BY END OF 2012, SAYS DOUGLAS UGGAH
Solution : Aimed at helping the State DID organize a river restoration and water quality improvement program for one river in their
state, with full stakeholder participation.
ARTICLE 5: THE STAR
ISSUE: SHUN REFRIGERATORS THAT WARM
(TECHNOLOGY BASED STANDARD)
Solution: Given climate friendly alternative technologies are available in the marketplace
ADVERTISEMENT
Moral 1Moral 2Moral 3Moral 4
REFERENCES: http://www.finlandtimes.fi/travel/2013/10/30/2990#prettyPhoto
http://www.ibtimes.com/fukushima-radiation-now-global-disaster-japan-finally asks-world-help-two-years-too-late-1416058
http://www.nst.com.my/nation/extras/green-technology-a-national-commitment-to-clean-living-1.155090
http://www.nst.com.my/nation/politics/lessons-from-china-on-reducing-air-pollution-1.107093
http://www.thestar.com.my/News/Community/2013/08/18/Ongkili-System-will-improve-water-quality-and-overcome-pollution.aspx
http://www.nst.com.my/latest/malacca-to-introduce-electric-bus-for-public-transportation-1.344743
http://www.nst.com.my/world/the-amazing-energy-race-1.313927
http://www.nst.com.my/nation/extras/green-technology-addressing-energy-security-sustainable-development-1.63390
Malaysia committed in addressing haze: Najib - Latest - New Straits Times http://www.nst.com.my/latest/malaysia-committed-in-addressing-haze-
najib-1.305508#ixzz2fxk1dwJm
http://www.china.org.cn/environment/2013-09/25/content_30129133.htm
. http://www.thestar.com.my/News/Community/2013/10/29/Its-time-to-regulate-Many-cashing-in-on-business-of-recycling-used-cooking-oil.aspx
. http://www.thestar.com.my/News/Environment/2013/10/28/Count-your-carbon-emissions.aspx
http://www.nst.com.my/nation/general/food-company-gets-heavier-fine-1.288782#ixzz2jr4XdiQt
http://www.ecoworld.com/business/chinas-permit-based-emissions-trading-to-cut-down-on-major-pulltants.html
http://www.huffingtonpost.com/2012/11/12/california-cap-and-trade_n_2118991.html
http://envirocivil.com/environment/hybrid-cars-vs-global-warming
. http://www.thestar.com.my/News/Nation/2012/05/15/Campaign-to-create-awareness-on-littering.aspx
http://www.nst.com.my/opinion/letters-to-the-editor/earth-hour-lessons-behind-switching-off-lights-1.243774#ixzz2fxoVYNrf
http://www.thestar.com.my/News/Nation/2012/09/06/Pollutionmapping-to-be-complete-by-end-of-2012-says-Douglas-Uggah.aspx
http://www.youtube.com/watch?v=PWT814xypFM
http://www.youtube.com/watch?v=yE44-OT0nGs
http://www.youtube.com/watch?v=-xPqjdPzVl8
http://www.youtube.com/watch?v=eS01JdsQcd4
http://www.youtube.com/watch?v=F0XmPhWi7zA22.