Istanbul Gelisim University IISBF SosyoCom: Monthly Events and News Bulletin (Issue: 21, September 2022)

Abstract

CAN WE SOLVE CLIMATE PROBLEMS WITH ECONOMIC POLICIES?

(We Already Created This Problem with Economic Policies)

The world began debating how to reverse climate change over a sweltering summer. In this context, faculty at Kalamazoo College in Michigan also embarked on a research that would scientifically address the importance of national initiatives for trade and environmental policies. The analysis by Patrik Hultberg, Virginia Van Dalson and Darshana Udayanganie, will be published soon in the Journal of Environmental Economics and Policy. The recommendations will emphasize the importance of Europe and the US adopting border regulation taxes by 2026 for foreign countries to reduce their carbon emissions. Hultberg and Udayanganie assert those taxes' necessity to the world’s environmental-policy deals—such as the Paris Agreement, the Kyoto Protocol and the Montreal Protocol— that seem to have shortcomings. Hultberg thinks the best solution is for all countries to work together and make these international agreements. Udayanganie, on the other hand, thinks that it is important to encourage actions that benefit the environment by calculating the amount of carbon content created by the production of a good, adding the tax applied to the producing country, and accordingly increasing the global price of the product.

With border tax regulation, carbon emissions transferred from countries such as Europe and the USA to developing countries can be reduced. At this point, there also may be an opportunity for an international intervention, at least, for Turkey's transformation into Europe's garbage center. A strategy that combines environmental and economic action can provide the best option in tackling climate change. This combination can force firms to clean up the environment in one country or to take actions that harm another country's environment in their own country. It can go a long way in curbing concepts such as carbon leakage, which is the movement of emissions from developed countries to weaker or nonenvironmentally regulated countries.

The researchers who conducted the study want to establish a more moderate system of mathematically combining climate and economic policies and teaching how to implement them. Thus, it can be made easier to teach this system to people and institutions working in the field of nature protection bBecause the main problem in most of the economics literature is that the models used are very intangible and mathematically very compelling. This will also make it difficult to teach relevant climate models to relevant individuals and institutions from both economics and mathematics perspectives. Therefore, it is important to develop a more understandable method in modeling the theory within the framework of mathematical economics. Academicians working on the subject aim to create a new literature in this field.