Economic Policies to Curb Global Warming - A Case of Papua New Guinea

Global warming is a serious problem which requires an urgent solution. In economics context, economists believe that carbon pricing, specifically carbon tax and its mirror image, cap and trade, are the best options and they suggest all countries should use it to address global warming (Goulder & Schein, 2013). However, advantages and disadvantages of carbon pricing have often resulted in some countries accepting the idea and some rejecting it. Therefore, this literature explains how the carbon tax, and cap-and trade work; the probability of their success, specifically in reducing greenhouse gas emissions, and how to attract countries that resist the idea of carbon pricing into implementing it. And finally, this article explains why a carbon offset scheme, under cap and trade, best fits developing countries and which Papua New Guinea can use to improve the lives of its citizens while, at the same time, reducing the concentration of greenhouse gases in the atmosphere.