MGT 660 UM Case Study Climate Change in Bus & Its Environment Paper


Use these 2 conceptual frames in your paper:
a.Explain the market failures that are leading to excessive emissions of greenhouse gases and causing climate change. Be sure to discuss and explain (in relation to climate change) the ‘tragedy of the commons’ and positive/negative externalities, and the role of prices as signals to consumers and companies. Bring in concepts from the readings (going back to the BGS chapter 2 and the reading on microeconomics of the environment). How is the atmosphere ‘a commons’, and why is it a problem? Be specific about the externalities. What is the role of cost-benefit analysis in evaluating whether to take action? (see Economics of Climate Change pp. 15-21). What are some potential approaches to addressing the problem? Is there a case for changing price signals (e.g. carbon taxes, a cap-and-trade system), or regulations on activities that cause climate change? 
b. Explore the rise of the clean tech sector. Why should the government use our tax dollars to support and subsidize the clean energy sector as a cluster to address climate change? Or should this sector be left to market forces, free trade, and the decisions of individual firms and investors? You should discuss the relevance of positive externalities (carbon reduction) as well as the cluster concept (Porter article) to think about the impact on regional employment and competitiveness. Where are the big opportunities in clean tech, and which regions and countries are likely to benefit the most? Should the US and Europe match China’s efforts to invest in cleantech and other fast-growing sectors?

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