Accounting Theroy

Topics: Climate change, Market failure, Market Pages: 15 (4723 words) Published: August 28, 2013
Introduction
According to a team of US scientists led by David Lobell, of Stanford University, due to climate change, directly influence in rainfall and temperature and result in yields of agriculture and increasing price of necessary food. Their findings indicate that, from 1980 to 2008, climate change declined global wheat output by 5.5% and corn output by 3.8%, compared to growth projections without warming (Anonymous, 2011). However, their research is only a little part of ice. Like ice shelf melting, sewage discharge and waste energy, the series of environmental problem lead to global warming, resource exhaustion and destruction of ecological balance in different countries. Therefore, in recent years, public opinion of worldwide regarding the environment and climate change has become increasingly highlighted, as government’s think tanks, political and others worked to focus on an important topic into a political issue in the world.

Traditionally, ‘… Change of climate which is attributed directly or indirectly to human activity that alters the composition of the global atmosphere and which is in addition to natural climate variability observed over comparable time periods’ is as more narrowly defined (Article of the United Nation Framework Convention on Climate Change, Xynas, 2011). Nevertheless, now the environment and climate change has become a significant issue for business due to the financial impact and unpredictability of increasingly frequent natural disasters. Thus, the issue is excessive considered from scientists, economists and political leaders. Meanwhile, the global response to the issue and need different countries’ public sectors make an effort to the issue’s mitigation, while many countries relief their climate change via political regulation and political pressure in economic perspective. What’s more, some researchers argue that environmental control has largely been driven by legislation, and government through commanding and controlling regulation enforce environmental measures. As a result, it is in the context that is generally more efficient measure than other approaches like the free-market.

In this paper, as a global issue, we discuss the debate surrounding whether or not the Australian Government should be considered the increasing level of legislation on the environment and climate change; whether or not pro-regulatory approach is more effective to collective support and action to ensure this problem’s mitigation, compare to the free-market approach. Moreover, through analysing impact of different stakeholders, compared to the two such market or government –based approaches and compared to advantages and shortcomings of each.

This essay is structured as follows. Part one describes academic controversy for the environment and climate change is introduced. Part two shows the definitions of the free-market and pro-regulatory approach and literature review on two approaches. In this section, I will explain various researchers at pains point out the various points of view on the environmental legislation, while add in relation to key theories for supporting regulation or free-market. Part three investigates the two approaches bring different stakeholder groups such as government, society and corporation to pros and cons of effects. Final part is conclusions. The essay asserts the government in Australia should apply to regulations for the environmental problem and achieve win-win with the relevant stakeholders.

Literature review
In this part of the paper, I will explain the concepts of the free-market and pro-regulatory approaches, and review different researchers point out different ideas for two approaches.

Concepts of the free-market approach
Some economists have various standpoints at different times on meaning of the free-market due to uncertain definition of free –market. Sometimes it is defined a market without any regulation. Sometimes, it is stated markets in which...
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