BUSN 2024 / BUSN 9021 Sustainable Resource Management

ENVS 8006 Introduction to Environmental Economics


Essay assignment


Go to the following website: This is the website of The Federal Government’s Department of Climate Change and Energy Efficiency. The website provides information about the Federal Government’s policy on dealing with climate change.


Based on what you have learned from studying BUSN 2024 / BUSN 9021 / ENVS 8006 and from consulting additional references, critically evaluate the Federal Government’s policy on climate change. Do you believe the Federal Government will achieve its aims and objectives with the policy it has proposed? Why or why not? What do you believe are the strengths and weaknesses of the policy?


Remember: You are to write an environmental economics essay on this issue. This is not a politics or geography essay.


The essay can be structured in the following manner (although it need not be exactly like this):

  1. Begin with an appropriate introduction.
  2. Briefly outline the climate change problem.
  3. Briefly outline the Federal Government’s planned policy response to climate change.
  4. Explain the economic reasons as to why there is a climate change problem.
  5. Suggest what policy instruments you think should be used to overcome the climate change problem. In doing this, discuss the reasons why you would prefer some policy instruments ahead of others to overcome the climate change problem.
  6. Reconcile/compare 5 with 3 to explain why you think the federal Government’s policy on climate will or will not work. In doing this, point out the strengths and weakness of the Federal Government’s policy.
  7. End with an appropriate conclusion.


Parts 4, 5, and 6 should use some of the material covered in the course. Use diagrams whenever necessary making sure: (a) they are relevant to what you are saying; and (b) you refer to the diagrams in the text of your essay.


Whilst some of the readings provided in the reading list for this topic should be sufficient to start you off, you will be required to consult additional references. Wikipedia websites do not count as peer-reviewed references. Assume there are no political or other impediments to introducing the policy instruments you believe are necessary to overcome the climate change problem.


This essay is specifically designed to see if you can use the material covered in the course to: (a) explain economically why a real-world environmental problem is occurring; (b) to put forward policy suggestions that might overcome a real-world environmental problem; and (c) to recognise the difficulties that arise when having to make a choice about which policy instruments are best to use (i.e., which are likely to be most effective).


Maximum words: 2,500.


Due Date: Thursday, 14 June by 4 p.m. The essay is to be submitted to Room 254 in the Social Sciences South building.



The average pattern of weather over a long period of time is climate. The climate of Earth warned and cooled for millions of year’s long time before we came on earth but it is a known fact that the climate of earth is becoming warmer now. This change in the climate is due to the excess emission of carbon dioxide gas in the atmosphere. With every passing day this problem of climate change is becoming more severe. The government throughout the globe is becoming more cautious regarding this problem. The climate change as seen by the whole world is gaining momentum day by day. The current situation is taking the humanity to a future which will be warmer than ever and nature’s tendency to maintain the ecological balance on its own would become even more difficult. The future generation will have to pay for the actions of the current generation. The system supporting life in the planet are constantly under a lot of pressure. The climate everywhere is changing at a great speed. In the near future there has been noticed a remarkable increase in the average air and ocean temperature, world is also witnessing a rise in the sea level due to melting of snow and ice. The rainfall and wind patterns are also changing due to the extra heat effect on the atmospheric and ocean circulation. One of the major effects of increase carbon pollution has led to acidification of the ocean, as quarter of the carbon dioxide is absorbed by the ocean water which gets dissolved in the water forming carbonic acid thereby making the water acidic. According to the Australian government every decade from 1940 in Australia has been warmer and they even say that from the year 2001 to 2010 has been the warmest decade on record.

Australian government is taking various steps to combat this problem of climate change like the clean energy future. The government has planned to divert the country to a clean energy future and will cut on pollution and make all investment in clean energy sources like solar, wind and gas. The Australian government has realised the importance of clean future and is now looking forward to long term prosperity thereby protecting the environment for the current and future generation.



In the city of Mandurah, which is around 74 km from Western Australia there are a high number of mosquitoes in this region and the amount present s capable of transmitting serious water borne diseases. They are born from the salt marsh and are around 1000 mosquitoes per square metre at some areas. Municipalities of Mandurah, Murray, Rockingham and Waroona collectively take action against it based on larviciding in which the mosquito is targeted to be dead before becoming an adult. The change in the climate has lead to a warmer weather and even a higher tide due to which the effect of the action taken by the government has reduced. So the efforts of the government are not getting the desired result due to the climate change (Australian government, 2010).


In Clean Energy Future plan the Australian government tries to promote and improve the overall efficiency level of small and medium business enterprises and community groups the Australian government has announced a grant of around $20 million. These grants will help the government in reduction of the greenhouse gas emission as the grants provided by the government will help to maintain the operating cost at a lower level even when the enterprise adopts various measures to cause least effect on the environment and reduce pollution. The policy has shown a very positive response by the industry associations. The plan basically is to reduce pollution and invest money on renewable energy, discourage the use of highly polluting sources of energy like brown coal.




The Australian government is keen to take all the steps required for clean energy future:


The most effective as well as economic efficient way to reduce pollution is carbon pricing. It is considered the cheapest way to combat pollution. It is accepted by the leading economist of the world that realizing carbon has been free throughout the world in spite of the side effects it has on the environment.  Carbon pricing will help in changing this situation by putting a price on the emission of carbon in the environment. This involves putting a price on carbon pollution on the largest producer of carbon in the country. This action will motivate the business enterprises to find more environment friendly ways to carry on production and reduce carbon pollution without government regulation.

In the view of Australian government carbon pricing will lead to a strong and growing economy. It is estimated that average income will grow strongly as it expected to grow by about 16 % as compared to the current level in year 2020.Even the national employment levels is expected to increase by 1.6 million jobs by 2020.

It is expected to cut pollution by around 5 % as compared to the current level till 2020 which is just similar to taking about 45 million cars off the road by 2020.





It is clear from the above diagram that with carbon pricing the gas emission will fall drastically in the years to come.



There is an abundance of solar, wind and various clean sources of energy in Australia.

Clean energy Finance Corporation: it will be involved in commercialization and utilization of clean technologies through an investment of $10 billion. It will be done through loans, loans guarantees and equity investment. It will help in the funding of project which it considers as a good renewable energy project by removing the barriers that come in the way. The investment allotted will focus on encouraging the renewable and energy efficient sources of energy and try to transform the technology used in the existing business enterprises to renewable and efficient sources. It will be run by an independent board.

Australian renewable energy agency: it will be involved in researching and developing renewable sources of energy and commercializing them later on. It will take care of the coordinating the investment of $3.2 billion. It is a independent statutory body and shows the efforts of the government in emphasizing the research of renewable sources of energy.

Clean technology innovation program: it will use an investment of $200 million to research and develop clean sources of technology.

Renewable energy target: encourage the use of renewable sources of energy by implementing carbon pricing.



The Australian government lays stress on using the existing energy sources in a more efficient manner by avoiding wastage of energy. Inspite of the fact that it looks like a small effort but sometimes small things have big effects so by conversing energy and avoid wastage of resources in business as well as the household sector will have a huge impact on the overall environment as it will help in the reduction of gas emission. The website living greener has discussed in details the ways which the government suggest that a household or a business enterprise can adopt to conserve energy that is basically using it more economically. An investment of $330 billion has been sanctioned to help low income groups adopt energy saving measures. The Remote Indigenous Program is made specially to provide 55 remote indigenous communities the funding to install renewable energy systems thereby reducing the usage of diesel for electricity consumption.Clean technology program which the government has specially drafted to provide funding of $1.2 billion to provide assistance to businesses adopt energy efficient measures. Even the carbon pricing has encouraged the business enterprises to be more energy efficient.



Australia has got significant opportunities to reduce the carbon pollution and increase the levels of carbon stored on land. Carbon farming initiative: economic rewards will be provided to the farmers and landholders so that they take step to reduce carbon pollution. Credits will be created in the accounts of farmers for each tonne of carbon pollution which they can store or reduce on land. The farmers can sell their credit to the business enterprises who want to offset their own carbon pollution. This initiative will provide a new income source for farmers; the regional Australian people will get new job opportunities. The carbon farming techniques will save our environment by reducing carbon emission and also increase food productivity as storing carbon in soil will improve the health of the soil and thereby increasing productivity. It also helps in reduction of soil erosion, creating biodiversity habitat and helps in restoring degraded landscapes.

Carbon Farming Initiative non-Kyoto Carbon Fund: Under this program the government will purchase carbon credit from the farmers and the government will invest a $250 billion.



Tax cut

The government has decided to use all the revenue produced by the carbon pricing to be utilised to help the households as it will be implemented in giving them tax cuts. It is estimated that in July 2012, the taxpayers having an income of around $80000 will get tax cuts, so approximately maximum of them receiving $300 per year. So according to this the taxpayers will not have to pay extra tax due to carbon pricing.

Household assistance

Under the new plan government is planning to provide help to the low and middle income group’s financial assistance so that they can bear the increase in the cost of living due to carbon pricing. So, with the implementation of various measures which the government is asking to undertake to control carbon emission the cost increment in the cost of living of the people would be $9.90 and the maximum which the people will be receiving is $10.10.



Every business enterprise whether it is small scale or a large the government has planned to provide assistance to them to take them towards a clean energy future. The government has planned to keep 40% of the total revenue which has come from carbon pricing for the assistance to the business enterprises.

Jobs and competitiveness program: it will help in making businesses which produce a lot of pollution remain competitive in the international market

Australian Renewable energy agency (ARENA): It will commence its operation from 1 July, it will basically incorporate measures managed by the Australian Solar Institute , the Australian Centre for renewable Energy and the Department of resources, Energy and Tourism.The Government will provide a Coal sector jobs package and Steel transformation plan.


It will comprise of drought, fire, wildlife extinction and widespread of mosquito borne diseases. It is estimated that farmers who were growing around 60% of the total national production will be keener to sell off their land or want to sell the water rights to the state and federal government. The rainfall is getting lower to 50% on an average hence Australia is witnessing a collapse in its agricultural sector and it is hampering the ability of the nation to feed itself. Things are getting worse as around 5 dairy farmers have committed suicide recently and fruit growers are abandoning their orchid. The levels of rainfall have fallen and as we know that with every passing year its effects would get more severe (Cart J, 2012).


The gas emission for which we are responsible will have tremendous impact on the future generations as its effects may even lead to famine, thunderstorm storms, etc. Why should the future generation pay price for our irresponsible and indifferent behaviour towards the climate? The climate is changing no effort can reduce its impact in the future until every individual takes an action against it. So i feel that in spite of the government taking steps towards it unless everybody is aware of its effects and everyone is willing to take action against it nothing can change (Gardiner S, 2010).

The government thought have taken various steps regarding the overall climate change but the plans and policies it has made are not well communicated to the residents because of which it has not been very successful in combating the issue.

Renewable sources of energy does not mean zero gas emission as they say that it is the best form of energy as it is produced from renewable sources. Even while producing this form around 8% is lost in the transit (Kelly T, 2010).

Carbon pricing is not good as it will make many people jobless and even the coal industries will have to suffer a major setback and it will even lead to industries flocking out of Australia i.e. all the investment will go overseas unless the government provides huge tax exemptions.. Carbon pricing should not be in force instead use of renewable sources of energy should be stressed upon so that the gas emission is less even the growth of the industry is not hampered. To encourage renewable and efficient energy sources government should provide easy funding to the industries (Malkin B, 2011).

Advancement has been made but in spite of this fact transition countries on a large scale have carbon intensive economy all around the world. The issue of climate change or the carbon gas emission requires global attention and steps at the international level needs to be taken as only implementing social and structural reforms at local level cannot be a solution as the emission made by the countries will harm everybody. So, creating an international committee looking into this matter and managing the emission of carbon by various economies and penalising the economy with the highest emission should be done. Unless the mankind as a whole will not take step to combat this issue its effects cannot be neutralised and the problem will keep on growing day by day. The Australian government though is taking action against this problem but still more efforts are required and rather than just trying alone to solve the issue a global action is also required.















Australian government, 2012. Department of climate change and energy efficiency, ‘climate change’ viewed on 28 May 2012.


Australian government, 2010. Department of climate change and energy efficiency, ‘Climate Change Adaptation Actions for Local Government’ viewed on 30 May 2012.


Cart J, 2012. The Los Angeles Times, ‘What will global warming look like? Scientists point to Australia’ viewed on 31 May 2012.


Gardiner S, 2010. ‘The Ethical Dimension of Tackling Climate Change’ viewed on 30 May 2012.


Kelly T, 2010. ‘Discussion paper on the National Carbon Offset Standard (NCOS) and a draft revised version of the NCOS’ viewed on 29 May 2012.



Malkin B, 2011. The Telegraph, Climate change action: Yes lobby versus No lobby’ viewed on 29 May 30, 2012.



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