🏛️ Government Policies for Sustainability
- Carbon taxes — tax on greenhouse gas emissions makes polluting more expensive, incentivising firms to switch to cleaner production.
- Cap-and-trade (emissions trading) — set a total emissions cap, issue tradable permits. Firms that pollute less can sell permits to others → market-based solution.
- Regulation — outright bans or limits (e.g. banning single-use plastics, emission standards for vehicles).
- Subsidies for renewables — reduce the cost of solar, wind, and electric vehicles.
- Research and development funding — government investment in green technology.
EU Emissions Trading System (EU ETS): The world's largest cap-and-trade system covers ~40% of EU greenhouse gas emissions. Companies receive or buy emission allowances and can trade them. The cap declines over time, pushing emissions down.
🌍 International Cooperation
Environmental problems are global — no single country can solve climate change alone. International cooperation is essential but difficult.
- Paris Agreement (2015) — 196 countries pledged to limit global warming to 1.5–2°C above pre-industrial levels.
- Montreal Protocol (1987) — successfully phased out ozone-depleting substances. A rare environmental success story.
- UN SDGs — a framework linking environmental sustainability with poverty reduction and economic development.
Why is cooperation so hard?
- Free-rider problem — countries benefit from others' climate action without reducing their own emissions.
- Developing vs developed — poorer countries argue richer countries caused the problem and should pay more.
- Short-term costs vs long-term benefits — politicians face elections every 4–5 years; climate change operates over decades.
- Enforcement — no global authority to enforce compliance.
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⚖️ Evaluation
- ✅ Carbon taxes directly target the externality — efficient price signal.
- ✅ Cap-and-trade lets the market find the cheapest ways to reduce emissions.
- ✅ Regulation can deliver fast results for specific pollutants.
- ✅ International agreements create global norms and targets.
- ❌ Carbon taxes may be regressive — hit poorer households hardest (they spend more on energy proportionally).
- ❌ Regulation can be inflexible and expensive for businesses.
- ❌ International agreements are non-binding (Paris) or nearly impossible to enforce.
- ❌ Carbon leakage — strict domestic rules may cause firms to relocate to countries with weaker regulations.
In IB essays: discuss the policy, evaluate its effectiveness and limitations, and suggest a combination of policies. No single tool is sufficient for sustainability.