Many people around the world are worried about global warming, yet the consumption of oil-derived products is not falling.One possible solution to this problem could be:
A)for the United Nations to outlaw the extraction of oil
B)for oil-rig workers to work together to reduce the amount of oil they extract from the ground
C)for environmental groups to bargain with oil producers, as per the Coase theorem
D)for companies to internalise the externality by joining together and acting as a single company

Question

Quizplus · Accepted Answer

Option A is potentially extreme and unrealistic, as oil is a vital resource for many industries and economies. Option B may not be effective if extracting less oil means reduced profits for oil-rig workers. While option C may be useful, it relies on the assumption that oil producers are willing to negotiate with environmental groups. Option D, however, allows companies to work together and share resources to reduce their collective carbon footprint, without sacrificing profits. This can be achieved through initiatives such as the creation of renewable energy divisions, investment in green technologies, and the adoption of sustainable practices. Therefore, option D is the best choice.

Many People Around the World Are Worried About Global Warming