Homework answers / question archive / Question B:4 (5 points) For most part of the present year the world vide covid-19 crisis have shifted focus of many/most humans

Question B:4 (5 points) For most part of the present year the world vide covid-19 crisis have shifted focus of many/most humans

Economics

Share With

Question B:4 (5 points) For most part of the present year the world vide covid-19 crisis have shifted focus of many/most humans. However, the global use of fossil fuel as an energy source still implies that our production and transportation give rise to carbon dioxide emissions and thereby potentially serious climate changes in the future. Assumptions: The reduction in emissions (Z) from one country is a Public good since all other countries will have the same benefit/positive effect on the stock of CO, in the atmosphere. Unfortunately, the cost for reducing (abatement) will still fall on the one country that tries to lead by example. The marginal cost for emissions reduction is calculated to be: MC(Z) = 100. The valuation/demand for reduction in emissions from one country is equal to: MB(Z) = 100 - Z Let say the globe consists of five identical countries only and that emissions reduction (Z) is expressed in per cent reductions. a) Show in graph the demand from the country in focus, the total demand from the globe and compare the private/one country solution with the social/global optimal solution. b) Relate your answer in a) to the actual situation when countries meet for negotiations (next time in Glasgow 2021). Historically, countries have had problem to agree how to reduce emissions of CO.. Do you have the reason for that in a)?