Climate Change Economics and Policy - Australias Climate Change - Case Study Example

Climate Change Economics and Policy Student’s Name Affiliation Course Date Abstract Over the years, climate change has articulated critical challenge to the global community with different nations across the world seeking long-term solutions to the problem of climate change and the greenhouse effects. In such efforts, the Australian government has adopted effective strategies that are aimed to mitigate greenhouse gas emissions and tackle the core environmental problem of climate change and global warming in its economy. For instance, the Carbon tax of 2012 and the coalition government’s strategy of the Direct-Action plan have been proposed to the same effect of greenhouse gas mitigation within the scope of curbing climate change with its adverse effects. The aim of the paper is to asses and reviews both the 2012 carbon tax strategy and the direct-action plan of the coalition government in relation to horticulture sector especially within the corporate case of horticulture agriculture in the economy. Based on the significance of this project, the paper will be divided into four section to effectively compare and contrast these policies in the aim of articulating their impacts on petroleum in the Australian economy. The first section of the paper is to describe the climate change impacts on the case of agriculture for food production within the economy. Then the paper will discuss the rationale and its theoretical foundations of these two policies on providing effective solutions to greenhouse gas emissions and climate change problem in Australia. The third section will identify various risks and possible opportunities in the petroleum sector and lastly to provide possible interventions, a recommendation with appropriate strategies to curb the effect of climate change and the greenhouse effect. Keywords: Carbon tax policy of 2012, Direct-Action plan, Greenhouse effects, horticulture, climate change and global warming. Introduction Climate change has been widely debatable topic across nations with much effort being emphasized on curbing greenhouse gas emission adverse effects and prevent further global warming (Stern 2007). The Australian government has been objective in reducing the greenhouse effects through different policies to effectively deal with the issue of climate change within its economy in different sectors. The Carbon Tax that comes into effect in July 2012 is one of the projected policies that were anticipated to be objective in dealing with the issue of climate change. The Carbon Tax is the fixed price greenhouse gas emission permit that was set for Australian business to pay a sum of $24.15 per ton of carbon emissions within its environment. However, despite the anticipated benefits of the Carbon Tax, much was not achieved with the policy. As a result, the government introduced the Direct-Action Plan to replace the Carbon Tax policy. The Direct-Action Plan was to efficiently source other effective alternatives in emissions cost to enhance clean environment in Australia. Over the last three decades, globalization process has enhanced international trade and immigration across the world for business and employment reasons. As people move from one place to another, food production and processing is becoming a critical aspect of any economy in the world today (Farmar-Bowers, Higgins, & Millar, 2012). Despite the essence that Australia has industrialized over the years, its horticulture sector remains an important area of raw material production and an employment creation sector. Climate change that has been caused by carbon emission is not only threatening the livelihood of many Australians but also killing the raw material base for the Australian government. Thus, Gore (2006) concludes that it’s shocking and highly traumatizing that the human race is committing a slow but sure suicide through environment pollution through carbon emissions. Based on such rationale, it is critical that the Australian government curb carbon emissions and a mend the destroyed ozone layer through the use of green energy in its economy (Black 2010). Climate Change Impacts on Horticulture Sector Global warming in the recent times has become a worldwide concern with its adverse effects on high temperatures and low levels of rainfall being felt more clearly in the world today (Stern 2007). The production of fruits and vegetables for domestic consumption and for exports after 1990, has declined drastically due to such climatic change in the world. Horticulture sector plays a critical role in the agricultural industry with its Gross Value Production estimated to be over $8.6 billion. Horticulture further provided 25% employment to agricultural workers within the economy (Turnbull & Lovett 2009). In additional, the sector plays a critical role in building primary industries within the Australian economy in supplying these industries with reliable raw materials for production for abroad markets. Despite such economic value that agriculture plays in the economy, horticulture sector is vulnerable to predicted climate change of environmental temperatures and rainfall in Australia. The climate change will impact horticulture sector on the plant growth, product quality, risk of diseases, pest and the overall performance of the agricultural sector. A temperature change as well as a change in amount of rainfall articulates adverse biophysical effects on the horticulture sector threatening the sector’s competitiveness and profitability value in the agricultural industry. The change in temperatures and rainfall will affect the horticulture sector in a number of aspects: Irrigation management impact: due to such changes, there would be an increased demand of reliable irrigation schemes that could meet effective horticulture production. Water availability for both horticulture irrigation and its production will also impact the government revenues thus, impacting the sector’s competitiveness and profitability. High economic effects: there will increased impact on the carbon reduction policy of the Australian government as the horticultural sector is susceptible to compliance costs of these climatic changes (Turnbull & Lovett 2009). Also, the Flow-on costs that would result from the supply chain that is essential for horticulture support; the sector is also be affected adversely as a result of new requirements for standard labeling and other regulations that could be imposed. Soil management: high temperatures due to global warmings effects as a result of depletion of Ozone layers would result to unpredicted heavy rainfalls that could increase the risk of proliferation and widespread soil related borne diseases. Thus, the overall management of horticulture would mean more revenue to the Australian economy which is a negative impact on the future performance of the sector. Effects on integrated crop-pests’ management: the climate change poses a critical change of the pest distribution over a large area, weeds, incursion threats and crop diseases will adversely impact the horticulture sector (Turnbull & Lovett 2009). Pests and diseases would undermine the production quality of fruits and vegetables that would not only affect the domestic market of Australia but also the export produce of the horticulture sector. Crop selection impacts: over the years, there are well-known cultivars that do better in particular locations with very minimal inputs to maximize profits. However, due to such climate changes that are predicted to take place, the adaptability of these crops and its suitability within these locations could be undermined thus, affecting growers’ irrigation schedules in Australia (Turnbull & Lovett 2009). Such impact could demand more agricultural experts, manpower, and mechanized agriculture to be able to maintain the current horticulture production within the Australian economy. Thus, climate change does not only threaten that current growing of food for human consumption in Australia but it could also negatively impact the government spending in the economy and it will also increase the rate of unemployment in the long-run. Theoretical Underpinnings of Carbon Tax policy The issues of climate change and carbon emission have been a top concern in the most economies all over the world. Different economies have adopted different approaches in taking bid of curbing carbon emissions such as the carbon taxes, direct action and emission trading schemes (ETS) (Shove, 2010). The 2012, carbon tax policy in Australia can be well captured with the rationale and theoretical underpinnings of discouraging carbon production through its pricing and the government raises revenue to compensate for such adverse effects of carbon emissions. Through the set tax price, carbon, emitters would be discouraged to produce more as its high carbon results to more tax. The rationale of the policy in such strategy was to encourage green technology implementation to effectively reduce carbon emissions in Australia. The scope of this policy was based on market forces of demand and supply to determine the emissions quantity of carbon emmision (Edenhofer, 2014). As businesses had certainty on the carbon emissions price, it was anticipated that such business could not only adopt green technology but also be more conscientious in keeping the environment free from carbon emissions. Despite the proponents articulating that carbon tax policy would be efficient and effective in carbon emissions in Australia towards the 2020 clean environment goal. Critics have asserted that the tax could adversely affect incomes and the economy’s productivity growth. The premises of such an argument is based on the simple rationale that the policy did increase the government revenue but it did very little in dealing with the issue of carbon emission in the Australian environment. However, its arguable that through an increase of government revenue, compensations could be possible to sectors that were affected with such carbon emissions that can be used to encourage productivity (Giddens, 2009). The policy would also promote green and low-emissions technology through the imposed carbon tax to emitters of greenhouse gases into the environment. Thus, the policy could not only reduce or discourage carbon emissions into the environment but would also raise government revenue to compensate for adverse effects of climate change and encourage green technology adoption. On the same grounds of carbon tax policy, the direct-action plan has been articulated by the Australian government as an intervention to directly influence on Australian enterprises to lower carbon emissions. The proponents of the policy intend to achieve the direct-action policy through closing high-emitters factories or plants, restrict investments on high carbon emissions sectors and subsidies low-carbon emissions products (Adger, 2010). Thus, major difference between these policies could be that in direct action plan, there is no government revenue. However, similar critics has emerged on the essence that the direct-action plan could affect adversely the incomes and the economy’s productivity growth and the policy would kill infant industries within the economy. Risks and Opportunities in the Horticulture Sector Climate change within the sector pose critical risks for the horticulture sectors such as poor qualities of its produces, the sector would lose its profitability and competitiveness in agriculture industry and high cost of production. High demand of irrigation schemes, crop selection technical support with pest and diseases management could further increase the cost of production within the horticulture sector (Bardsley & Rogers, 2010). Inflow costs such as strict regulations and labeling requirement would further increase the cost of production both in Australia and abroad for its exports. On the other side, horticulture could attract a number of opportunities such as high investment in the sector, if the government could discourage high-carbon emission sectors under the direct-action act. Compensation from the carbon tax revenue under the carbon tax policy could enhance the sector’s productivity and profitability in the long-run; Industries, will shy off from carbon emitting businesses, horticulture would source and create employment opportunities in Australia, thus, enhancing productivity in the economy. In conclusion, climate change is a cancer that every human should strive to curb its adverse effects through different approaches that have been proposed to reduce carbon emission in the environment. Carbon emission has been attributed as a major contributory factor of climate change and global warming. Policies such that the direct-action plan and carbon tax policies would be enough to deal with this issues. There are a number of engineered solutions such as exploring the correlation between global warming and thermodynamics to establish workable and concrete solutions for climate change in Australia which can offer alternative as solution. The government should also encourage adoption of different green technologies in its productions such as biofuels and phytoremediation technologies to curb carbon emissions in the environment. Besides, the government can also discourage the use of non-biodegradable and other inorganic fuels that largely contribute to carbon emission within the operations of the economy. References Stern, N.H., 2007. The economics of climate change: the Stern review. cambridge University press. Turnbull, C. and Lovett, S., 2009. Climate change and the Australian horticulture industry. Shove, E. (2010). Beyond the ABC: climate change policy and theories of social change. Environment and planning A, 42(6), 1273-1285. Hamblin, A. (2009). Policy directions for agricultural land use in Australia and other post-industrial economies. Land use policy, 26(4), 1195-1204. Giddens, A. (2009). The politics of climate change. Cambridge, UK. Edenhofer, O. (Ed.). (2014). Mitigation of climate change. 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