Greenhouse Gas Version 2

Many human activities are responsible for the production of greenhouse gases. Generating electricity is the single largest source of CO2 emissions in the United States, followed by transportation. Negative externalities are created by individuals that engage in more than the economically efficient amount of an activity, such as driving. Because the driver enjoys all of the benefits that come along with driving and only suffer part of the cost, they do not put a limit on how far or how often they should drive.

The only way to get individuals to participate in reducing greenhouse gases is by having them bear all the costs of their actions. This is difficult because the costs are so little compared to the benefit, so why give up something that benefits more than sets you back. Two different methods are being proposed in order to help humans take into consideration the costs of their actions in order to reduce production of greenhouse gases. The methods proposed are government regulation and taxation. Unless the government sets regulations and taxes, the individual level of involvement will be very low and unless many people participate, the amount of greenhouse gases will not be significantly reduced.