International Trade and Commercial Policy – Case Study Example
24th April The background and the recent situation in developing countries international carbon emission trade indicate that carbon dioxide that is emitted by the developing countries is approximated to be 127%. The approximation is based on the research conducted by Energy Information Administration (EIA). The recent trend of the production of fossil fuels indicates that carbon emission by 2040 will increase by 46%. The developing countries carbon emission outpaces developed countries emission based on the fact that the rate of their economy growth is high and they frequently use fossil fuels. The economic growth that is highly increasing in the developing countries play a significant role in which the world has to consider other energy sources due to the demand. For example, in the case of China and India where the economic growth is so high, when combined they consume half of the world’s energy. By 2040, it is projected that carbon emission intensity will reduce by 1.9% in Economic Co-operation and Development countries (OECD) and 2.7% for non-OECD (Mad and Andrew 25). To lower the fossil fuel that increases carbon emission in developing countries, the use of coal projects can be started in the overseas.
The Kyoto treaty that was passed by the senate to ensure that commitment of the developing countries can be part and parcel of solution that can lower carbon emission has to be attained so that they can solve climate change challenges. For example the tsunamis, global warming and hurricanes that occur as a result of high temperatures and climate change have to be dealt with accordingly. The reason for developing countries willing to join the international carbon emission trade is to ensure that global problems like global warming can be solved by the global solution. The solution to global warming cannot be achieved by an individual country, but developed and developing countries must coordinate to address the problem. Another reason developing countries need to join the international carbon trade emission is based on the fact that developing countries have increased the carbon emission, and thus it will outdo the industrialized countries (Dinar and Philippe 32). An agreement must be signed to make sure production of carbon emission in the industries is reduced so that the violation of “international energy outlook 1999” can be made effective and followed strictly. Lastly, developing countries need to join carbon trade since emission can be reduced by low-cost methods comparing with high and developed countries carbon emission which requires high -cost reduction methods.
China being one of the most important segments in international carbon emission trade and an industrialized country would gain low cost of meeting the Kyoto Protocol targets. It is based on the fact that it would be allowed to purchase the emissions reductions from those developed countries. The loss that China is going o incur is that fossils fuel production will be reduced making energy production to be low.
Indonesia as one of new international carbon emission import country is willing to join international carbon emission trade whereby it can buy greenhouse gas so that carbon emission can be reduced. Due to the Kyoto protocol rules carbon emission must be reduced so that climate change among other effects of carbon emission can be reduced. Indonesia is joining carbon trade to ensure that it is going to save its carbon fields forests. By protecting the carbon forests, Indonesia earns carbon credits which are later sold. Indonesia is gaining carbon credits that are later sold to the developing countries so that reduction of carbon emission is reduced globally. Application of REDD initiative that is concerned with how countries can be compensated to make sure that deforestation and degradation are not carried is profitable to Indonesia. One loss of Indonesia as a carbon vendor is that their tropical forests will be no longer be used by Indonesia fraternity but it is going to be under the control of REDD initiative.
In conclusion international carbon emission trade, developing country focuses on the economic development. They are willing to lose some environment profits to increase their economy since they can come up with another solution to develop energy without focusing on the environment. If the Kyoto Protocol rules are followed when developing energy to their economy, then it implies that they can become carbon vendors and thus generating revenue to the economy. Indonesia as one of new international carbon emission import country is willing to join international carbon emission trade whereby it will buy greenhouse gas so that carbon emission can be reduced. Due to the Kyoto protocol rules carbon emission must be reduced so that climate change among other effects of carbon emission can be reduced. Indonesia is joining carbon trade to ensure that it is going to save its carbon fields forests. By protecting the carbon forests Indonesia earns carbon credits which is later sold. Indonesia is gaining carbon credits that are later sold to the developing countries so that reduction of carbon emission is reduced globally. Application of REDD initiative that is concerned with how countries can be compensated to make sure that deforestation and degradation is not carried is a gain to Indonesia (Whalley and Yuezhou 42
Dinar, A., and Philippe, A. Factors Affecting Levels of International Cooperation in Carbon Abatement Projects. Washington, D.C.: World Bank, 2008. Print.
Mad, N., and Andrew W. Carbon Dioxide Emissions Embodied in International Trade of Goods. Paris: OECD, 2003. Print.
Whalley, J., and Yuezhou, C. International Trade and the Negotiability of Global Climate Change Agreements. Cambridge, Mass.: National Bureau of Economic Research, 2009. Print.