Economics of Climate Change

Carbon Dioxide (CO2) is the primary greenhouse gas emitted by human activities, primarily through the burning of fossil fuels.

Electricity generation, particularly from fossil fuel-based power plants, is the largest contributor to global greenhouse gas emissions.

Global Warming refers to the long-term increase in Earth's average surface temperature due to the accumulation of greenhouse gases in the atmosphere.

Externality refers to the idea that an economic activity imposes costs or benefits on a third party without compensation.

A carbon tax is a tax levied on the carbon content of fossil fuels, aiming to reduce greenhouse gas emissions by making fossil fuels more expensive.

The Paris Agreement is an international agreement that aims to limit global warming to well below 2 degrees Celsius, preferably to 1.5 degrees Celsius, compared to pre-industrial levels.

Mitigation refers to the process of reducing greenhouse gas emissions to limit climate change.

Agriculture is particularly vulnerable to the impacts of climate change, as changes in temperature, precipitation patterns, and extreme weather events can affect crop yields and agricultural productivity.

Adaptation refers to the process of adjusting to the impacts of climate change to minimize harm and maximize benefits.

The Tragedy of the Commons refers to the idea that individuals acting in their own self-interest may collectively deplete a shared resource, leading to an inefficient outcome.

Resilience refers to the ability of an economic system to withstand and recover from the impacts of climate change.

A Pigouvian Tax is a tax levied on activities that generate negative externalities, aiming to internalize the costs of those externalities and promote more efficient outcomes.

Mitigation refers to the process of transitioning to a low-carbon economy by reducing greenhouse gas emissions.

Electricity generation, particularly from renewable energy sources, is expected to play a significant role in the transition to a low-carbon economy.

Sustainability refers to the idea that economic growth and environmental protection can be mutually reinforcing, aiming to achieve a balance between the two.