The paper "Applied Analysis of the Carbon Price Mechanism in Australia" is a perfect example of a macro & microeconomics case study. The global climate is changing day in day out. Greenhouse gas emissions from human-related ventures have led to the current topical issue called global warming, which if not checked can lead to global socio-economic, political and health-related problems. Some of these impacts are unavoidable. Continued emissions of the greenhouse gases at or above the current rates could lead to further warming, therefore causing further changes in the atmospheric temperatures over time. Before the initiation of the industrial revolution, the global greenhouse concentration stood at around two hundred and eighty parts per million of carbon dioxide but currently, the concentrations are around four hundred and thirty parts per million.
There has been a drastic increment in carbon dioxide concentrations and this scenario needs an immediate concise policy action because if nothing is done by the year 2100 the carbon dioxide concentrations will reach a high of 1,560 ppm. These high carbon dioxide concentrations are associated with a high magnitude of irreversible climate change. The scenario where no mitigation occurs is referred to us as the ‘ reference scenario’ .
Which according to economics, it assumes that the current trends are left to continue into the future. The reference scenario does not include the impact of global atmospheric climate change on the economy. Addressing the problem of the rise in atmospheric greenhouse gas concentrations so as to have their emissions reduced significantly, will have a resultant reduction in the risks of dangerous climate change-related problems and this requires a fundamental shift in current global carbon dioxide emission trends.
This requires considerable changes in global economic activity. The carbon price mechanism was formulated to ensure that the cost for carbon sourced energy is properly determined for its impact on the environment over non-carbon-based solutions.
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