EXTERNALITIES OF GLOBAL WARMING
In economics, an externality can be explained as a cost or benefit that is not transmitted through prices and incurred by party that does not agree to action that cause the cost or benefit. A benefit would be a positive externality while a cost would be a negative externality.
Global warming can be defined as the increase in average total temperature of the earth’s near-surface air and oceans due to emission of green house gases to the atmosphere (Hansen 2000, p. 43). Global warming phenomenon has been observed since the second half of the 20th century and it has continued to rise. It results from emission of green house gases like carbon dioxide, nitrites, methane, and others from increased human activities like burning of fossil fuel in driving, farming like rice faming that emits methane, burning of carbon matter, and many others.
The concept of global warming can be explained in both positive and negative externalities. In positive externalities, global warming is mainly caused by emission of green house gases through production of goods and services (Sankar 2003, p. 72). This means that there are individuals and organizations those benefits from emission of green house gases by making profits through selling goods and services in the process. On negative externalities, the cost of global warming effects is borne by those who have to pay for the consequences of global warming (Kagel 2006, p. 90). Negative externalities of global warming include rise in prices of foods due to food shortage, loss of species of animals, spread of diseases like malaria, and many others.