Over recent years, China’s economy has been rapidly growing. China is ranked as the largest exporter, and second largest importer all around the world. However, there are side effects to its success, because China has become the second largest greenhouse gas emitter in the world. Nowadays China’s accounts of carbon dioxide are the largest amount in the world, with 23% of global CO2 emissions. The types of pollution include air pollution and water pollution, both of which are harmful to people and wildlife. As mentioned above, China's increasingly polluted environment is largely a result of the country's hurried development causing a large increase in energy consumption, which is almost entirely produced by burning coal. The Chinese government in fear about the future environment of the country. China has achieved some improvements in environmental protection during the recent years. Nowadays China is looking to increase the use of market mechanisms to help clean up its environment and is considering a nationwide trading system for pollution permits.
Impact of pollution on economic and social environment.
In the last two decades, the pollution in China has increased substantially. The lack of good air quality is especially prominent in the more urban, industrialized areas of China. The pollution is created by the industries, automobiles, and power generation. The air contains heavy metal, dust, coal, rocks and many more dangerous things for the people. There are different groups that are affected by pollution in different ways. People get short-term effects, such as irritation of eyes, nose and throat, headache, bronchitis and pneumonia. Long-term effects include lung cancer, heart disease and even possible damage to the brain, nerves, liver and kidneys. According to the Ministry of Health, air pollution has made cancer the leading cost of death in China. In addition, pollution effects on economic losses due to: corrosion of various materials and their protective covering; maintenance costs, inside and outside and other buildings; expenditure directly incurred by the adoption of technical measures for the reduction emissions from factories; increase in cost of electric power because of dust removal and other treatment of smoke from power or nuclear stations; increase in transport costs and unburnt residue chimneys and various engines which contributes to the general pollution. Pollution is not only affects the people, but also the quality of fresh water, produce, and other natural resources.
Government Intervention to the Market
It is important that there is a need for some government intervention, but sometimes it should be minimal. Because policy framework is sometimes more effective when there is less government intervention, and this allows more flexibility for corporations to achieve efficiency. However, in order to turn around the deteriorating air conditions, the government in China is already trying to intervene to the market. Because it is hard for businesses, enterprises to put the needs of society before their own. Although desirable, the market cannot efficiently reduce pollution without the help and redirection of resources by the government.
The USA trading scheme experience
The U.S.A. is next, after China, the largest source country of greenhouse gases, producing about 18% of global greenhouse gas emissions. Naturally, being a more global and the country's economic and social development with a variety of international obligations, the United States cannot ignore the problem of global climate change. A growing number of environmental programs to reduce greenhouse gas emissions based trading system prompted American politicians to think about the possibilities of a national emissions trading system for greenhouse gases. Regional Greenhouse Gas Initiative was launched in 2009 as the first system of emissions trading in the United States. In 2009-2011 RGGI managed…