Answer to Question #54635 in Microeconomics for Mel

Question

According to economic theory, under what circumstances should a government intervene in issues of climate change?

Answer 1

The role of government in the climate change issue is to guide the activities and a lifestyle of the local industry and population towards low carbon economy. These actions will lead to a greater country and economy resistance in the future. The role of government in this process is:
- to help in improving knowledge about climate change issues;
- to provide regulatory framework for insurance markets;
- to foster growth in order to help with coping with climate change consequences and facilities adaptation.