Applied environmental economics question Essay Example

MICORECONOMIC ANALYSIS OF CLIMATE CHANGE

Lecturer

Abstract

The paper focuses on implication of economy of climate change. We will conduct a research on agricultural farmers in Africa (Cameroon, Equatorial Guinea, Republic of Congo and the DRC) to examine the impacts of climate change on their farming including the economic factors. Our main research question; How has the climate change affected the lives of the agricultural farmers and the measures put in place by the farmers in response to climatic changes (Gu 2008).

Introduction

Our planet is at a state of discomfiture with the current trends in the environmental conditions. Several factors contribute to this effect. Among them is climate change, global warming, pollution, and overpopulation, exhaustion of natural resources, poor waste management and deforestation. Among the above challenges, this paper focuses on climate change as a current issue that subjects our planet to environmental crisis (Gu 2008). This paper will therefore analyze the economic parameters and how it affects climate change. Role of the government will then be considered.

Review of the literature

This is a region that lines the equator and would be the most affected by the climatic changes. The impacts would be felt more by the poor small scale farmers who are not able to adjust their production as the climate changes. The main cause of climatic change is the global warming due to release of hazardous carbon waste to the atmosphere (Microeconomic Analysis Goes to Market 2011).

Figure 1 showing impacts of climatic changes along the African Equatorial countries (Moon 2014).

Their accumulation would then lead to depletion of ozone layer leading to direct penetration of sunlight and heat. Once the heat from the sun has penetrated the blanket formed by the carbon, it does not escape as it is trapped as a result of its decreased penetrance strength. The farmers are therefore exposed to a new trend in climatic patterns posed by increased heat in these places that were previously cold (Microeconomic Analysis Goes to Market 2011). This has therefore led to varied climatic patterns including unpredictable rainfall with prolonged or shortened duration of sunlight.

Data used

The data used in the analysis was majorly secondary data of the countries for the last ten years. A survey was conducted to gather the data among various farmers of the selected countries (Gu 2008). The data used was economically analyzed to determine the extent of the impacts of these climatic variations on the economy.

Figure 2 showing temperature and precipitation in Cameroon (Gu, 2008)

Microeconomic analysis of the issue

Microeconomic analysis was done using the main tools of economic analysis. Through this, the strengths and the weaknesses of the economy are easily determined. In this case our research question would be answered by determining the impacts of climatic changes on the economy. This would then be followed by recommendations to outline the measures to be adopted in revitalizing the agricultural sectors as measures are also put in place to limit the causes of the environmental changes most so climate change (Microeconomic Analysis Goes to Market 2011).

This research incorporates the use of tools such as economic variables, slope, Demand Function, Differential Calculus.

Economic variables

This is the analysis of variables that would give a determination of the level of relationship between the two factors that varies. In this case, we will look at the demand and supply of the agricultural products (Moon 2014).

Figure 3 showing variation of demand and pricing of agricultural products (Moon 2014)

The demand of the agricultural products remains at a higher level even as its supply is decreased due to climate change. The cost of production remains high as the prices of fertilizer among other factors of production such as land value increases. This is so even as the output from production is low due to poor climatic conditions. Increased expenses such as in labor whose value increases contributes total increase in the cost of production.

This tool is essential in determination of economic analysis by its ability to aid in identification of impacts that re witnessed in a variable as affecting the other variables as well. It defines the relationship between a change in a dependent variable and that for independent variable. Dependent variable is that whose determination is influenced by the other variables that are related to it (Todd et al. 2004).

Figure 4 showing sloping between the quantity demand and the price as well as supply (Varian 2016)

This in this case would be indicated by the price of a commodity that is dependent on its demand. If the demand increases, the pricing would increase. The increased demand of agricultural products would call for an increase in the prices leading to financial implications on the people living in these regions. All these are secondary impacts of climate changes. The independent variable is that which is not affected by the change in the other variables. The price of a commodity is independent while the demand is dependent.

Slope is determined by determination on the y-axis over the change on the x-axis. The relationship as determined by the slope varies depending on the level of relationship. Using a straight line to indicate the relationship, a steeper slope would indicate a weak (Todd et al., 2004). The vice-versa applies. Having the demand on the y-axis and price on the x-axis, an increase in the price of the agricultural products due to the climatic changes would lead to decreased demand.

Demand Function

This provides for both linear and no-linear analysis of the demand and the pricing of the agricultural products (Gu 2008). It is more related to slope.

Differential Calculus

This analysis is done and would suggest an amicable solution to the invariables and the changes experienced that serve as the cause of the variations. It incorporates the concept of derivative which is a subject of Marginal cost and total cost changes that occur due to a change in a determinant unit (Moon 2014). It considers the actual change in the y-determinant and the x-determinant. For example,

Y1-y0= Δy

Similarly, change in x is also determined in the same way.

The Δy / Δx is then used to obtain a slope.

Discussion, critical evaluation personal recommendations

Climatic changes would translate into decreased agricultural produce. This would compel farmers to adopt expensive methods of farming including the greenhouse method. The farmers would also be compelled to adopt increased labor and adoption of expensive machines to facilitate their production. To cater for the increased expenses in production, the famers will have no option but to increase the cost of their products as a compensatory measure for the increased costs incurred (De Maret 2017). The increased prices will have a direct impact on the customers who would then opt o have a decreased consumption of the agricultural products that are relatively expensive. This would translate to the changes realized by the tools of microeconomic analysis that have been discussed above.

Recommendations of this study would be government involvement to subsidize the costs of production to assist farmers put up with the poor climatic changes. This could be in form of direct financial assistance of putting up measures to counter calamities that occur as a result of poor climatic conditions such as flooding (Barthwal 1992).

Figure 5 showing change among the farmers with government intervention (Barthwal 1992)

The government could also take part in limiting the impacts of climatic changes by primarily putting in place rules and regulations that control that control waste product release to the atmosphere (Varian 2016). This can be done through regulating the industries that emit direct carbon as waste by requiring them to adopt recycling methods and use of fuel with low carbon content. Another role that can be played by the government is the public education on primary waste management and adoption of systems that restrict poor waste disposal.

Conclusions

Environment is an issue of concern with regards to the secondary effects it has on the citizens. Production f agricultural products have decreased amidst increased demands (Moon 2014). The pricing has increased with the burden left to the consumers of the agricultural products. Increased pricing has resulted into decreased demand for these commodities. Microeconomic analysis tools used such as Differential Calculus, Demand Function, Slope, economic variables have indicated decreased production of the commodities due to increased costs incurred leading to high pricing and decreased demands.

Bibliography

Barthwal, R. R. (1992). Microeconomic analysis. New Delhi: Wiley Eastern.

De Maret, P. (2017). Equatorial Africa. Oxford Handbooks Online. doi:10.1093/oxfordhb/9780199675616.013.009

Gu, G. (2008). Intraseasonal variability in the equatorial Atlantic-West Africa during March–June. Climate Dynamics, 32(4), 457-471. doi:10.1007/s00382-008-0428-0

Microeconomic Analysis Goes to Market. (2011). Micro Markets, 131-186. doi:10.1002/9781118268131.ch4

Moon, & D.-J. (2014). Congestion-Prone Services under Quality Competition: A Microeconomic Analysis. Berlin: Springer Berlin.

Todd, M. C., & Washington, R. (2004). Climate variability in central equatorial Africa: Influence from the Atlantic sector. Geophysical Research Letters, 31(23). doi:10.1029/2004gl020975

Varian, H. R. (2016). Microeconomic analysis Equatorial Africa. Oxford Handbooks Online doi:10.1029/2004gl020975