The changes required to address the environmental problems facing the world at the early stages of the twenty-first century are not all as startling or lifestyle-changing as these examples and questions infer, but it is probable that many required changes do represent changes of a stepped and profound nature.
The Stern Review‘
This report was notable for a number of reasons, not least of all because it was primarily an economic review of climate change, rather than one undertaken from a purely environmental perspective. The key findings were:
•Ignoring climate change effects will damage economic growth.
•Climate change is happening and measures are required to help people adapt.
•Failure to act appropriately now will cause disruption to social and economic activity later in the twenty-first century similar in scale to the Great Wars and the economic depression of first half of the twentieth century.
•The scientific evidence points to increasing risks of serious, irreversible impacts form climate change associated with a business-as-usual (BAU) approach.
•Because the economic analysis of climate change requires intertemporal analyses (i.e. analysis across generations rather than the more common single generational analysis), issues of morals and ethics are fundamental to overcome the limitations of a marketbased model of consumer preferences.
•At the basic level, the global environment and ecological system, which provides us with life support functions such as stable and tolerable climatic conditions cannot be substituted.
•The benefits of strong, early action considerably outweigh the costs.
Stern makes considerable reference to the phenomenon of intertemporal equity. By this is meant the need to try and bring into the economic analysis the views, preferences and interests of future generations. In order to assess future benefits and costs in present-day values, it is common practice to discount these future benefits and costs by applying a discount rate that reflects the time value of money and the risk of a project, in all risk‘s various norms.
Market failure: can be viewed as a situation in which individual‘s pursuit of self-interest leads to a negative result/s for society as a whole.
In terms of intertemporal equity/welfare, something or somebody must represent the interest of future generations in the decision-making process because self-interest denies the relevance of the interests of others.
Because of the scale, the problems and challenges that China faces are also the world‘s problems and challenges because if China cannot resolve these issues without destabilising world food, mineral and energy markets, political turmoil could be the consequence. China is not ignoring the environmental impact of its rapid economic development. Some of the leading examples of environmentally sensitive architecture, building materials, indeed new cities, are to be found in China.