The Environment and the Marketplace: The Present and Future State of Markets for Greenhouse Gases

Abstract

Global warming is becoming a great concern of citizens worldwide. While many nations are addressing this issue, others continue to emit excessive emissions of carbon dioxide into the atmosphere. The Kyoto Protocol attempts to gather the international community under an agreement to reduce the emissions of greenhouse gases. However, many nations question how they will achieve its baseline standards and whether or not these standards are equitable. As nations currently use a variety of methods for reducing emissions, it is becoming increasingly important to find a policy instrument that can apply internationally. This paper provides a detailed approach to addressing climate change through the use of market mechanisms and execution of the precautionary principle. It also introduces current international policies and focuses on policies of the United States. Because the consequences of global warming are uncertain, it is important to apply an efficient and effective policy instrument. This discussion addresses how markets are established and why they are an efficient means to emissions abatement.