Environmental Issues & International Business

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Since 160 years ago, years of 2000 to 2010 was recorded as the world’s warmest decade. This is supported by Cavanagh (2004 as cited in Brown, 2001) that global warming will cause calamitous trouble created around the world. The major contributor to global warming is caused by a greenhouse effect due to massive carbon dioxide emission. According to Shelley (2002), EPA has stated that the major contributor into the rising of greenhouse gases level is due to industrial and transportation activities involving the burning of fossil fuels as well as the deforestation. Therefore, government intervention seems to be tremendously essential to combat with global warming issues. However, this essay will focus more on how the government policies regarding on global warming specifically on fossil fuels combustion (oil, coal and gas) issue affect the international business including the arguments. The positive and negative sides it could also be the opportunities and challenges.

According to Dinica (2002), energy policy is one of the government packages to reduce fossil fuels combustion. Supply and demand side areas of interventions are being used since supply and demand are the nature side of business sector. However, that will be the complex one to elucidate. The simpler way to explain is to discuss policies that affect several sectors or industries such as transportation and oil sectors. According to Dinica (2002), these sectors are highly involved with the policies of carbon taxes and voluntary agreements as well as increase in oil price.

The European Environment Agency (EEA) declared that airline carbon emissions increased by 86% in the European Union between 1990 and 2004 and thus the European Community now are imposing the carbon-trading scheme to any airline that travel within the area where those airlines have to buy permits for exceeding carbon threshold as well as imposition of carbon taxes (Boyd, 2007). As a result, passengers have to bear with the increase...
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