Climate change a market failure.

I have read a really interesting article about climate changing in a market failure.

So, the term market failure means that when the free market mechanism fails to achieve efficiency.

In 2007 at economic public lecture in Manchester, economist Sir Nicholas was talking about that climate change is a result of the greatest market failure that the modern world has seen and he clamed that climate change because of market failure in the world. Sir Nicholas believes that the problem of climated change involves a fundamental failure of markets and they damage others by emitting greenhouse gases and they generally do not pay. The evidence of the seriousness of the risks from inactivity or delayed action is now overwhelming. This problem is global and it must be a cooperation on a global scale. Also he discussed about that rich countries must lead the way in taking action. It means that: adopting ambitious emissions by reduction targets, encouraging effective market mechanisms, supporting programmes to combat deforestation, promoting rapid technological progress to appease the effects of climate change. The first involves rich countries by reducing their greenhouse emissions by at least 80%. Also Sir Nicholas claimed that countries must make a substantial trade between countries, including rich andpoor countries, in green gas emissions. He also said that for an international programme to combat deforestation, which contributes 15-20% of greenhouse gas emissions.And rich countries have to respect their commitments to 0.7% of GDP in aid by 2015. This will yield increases of 150-200 billion per year. The extra costs developing countries will face as a result of climate change more likely to be rising of 80 billion per year and it is massive that extra resources re avaible for new initiatives. Sir Nicholas claimed that this global deal includes effectiveness, efficiency and equity. In many countries there will be different choices of instruments such as taxes, trading, conditions and different technological mixes. In many countries there is a range for energy efficiency, which both reduces emissions and reduces money. So, rich countries have to reduce their gas emmisions otherwise market failure in the world will continue.