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.