Part 3. Economic Growth
Environmental sustainability in the EU
The European Union primary goal is the sustainability development since it remains a great hurdle in the community. Sustainable development is comprised of three parts: economic, social and environmental sustainability. The main objective of EU is to consistently improve the quality of life in the environment for both the existing and future generations. The environmental sustainability is of great concern due to the energy crisis, climate change and global warming. This has led to the EU to develop long term missions and visions to prevent such an incident in the future (Rifkin & Jeremy 2004).
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Environmental sustainability in the EU has three objectives when it defines the environmental and social responsibility that it has. This includes ensuring that the projects implemented comply with the EU environmental principles and standards, promotion of projects aimed at protecting and improving the natural and the built environments. (Gráinn, 2007). The EU funds its member countries so that they can deal with the nightmare of protecting the environment for the good of the people. The EU also supports renewable of bio-fuels and bio-energy, the criteria to sustain the environment and the trade policy.
Externalities associated with non-renewable energy use.
Rising debates on the sources of energy argues on whether the priority is a low price of the energy against a low impact to the environment. This is perceived as a debate of subsidies versus externalities. Many do not understand that externalities are the benefits that the society can gain but they do not appear as market prices of particular goods. This leads to an emergence of a vocabulary, true costs. Externalities involve two dimensions: positive and negative. Pollution is negative as it will lead to the cleanup cost to buyers or sellers.
For instance coal is associated with externalities such as coal subsidies from the government, the high rates of illnesses and deaths due to mining pollution, air pollution, costs of monitoring and cleaning up the environment, water pollution, emission of green house gases and a great loss of biodiversity.
Renewable energy sources and their future
Wind energy is a great renewable energy source. Different societies since ancient times had developed a trend of utilizing its availability. Windmills were used to pump water for irrigation and for domestic use. Wind energy is now used to substitute electricity generated from fossil fuels. It is surprisingly to note that despite the high demand for wind energy, the costs of it is still minimal thus making it the best option amongst other sources of renewable energy.
The current state of technology in generation of wind energy is highly evident. There is utilization of both the stand alone and the grid connected wind power generation. The wind turbine technology is evolving to meet the demand developing in the market. There is the innovation of important and useful applications like the offshore wind energy machine, power grid integration, and strong designed turbines.
Potential for using the resource
In the United States, the utilized wind technology leads to generation of 37,000,000 gigawatt electricity hours annually. This increase as days goes by thus indicating the potential in generation of renewable energy. There are policies that have been formulated by the ministry of energy and they are adhered to so that renewable sources of energy remain a priority.
Environmental sustainability as a source of continuous economic growth
Environmental sustainability has led a continuous economic growth across the globe. The eco-efficiency measures that are taken reduce a lot of hazards that can emerge and this makes the environment for investors favorable to work in. the measures that are taken to curb pollution serves a greater role in enhancing a sustainable environment.
Summary
In support of environmental sustainability, EU supports renewable of bio-fuels and bio-energy, the criteria to sustain the environment and the trade policy. The policies that are aimed at bio-fuels ensure that they promote bio-energy and this prevents excessive pollution of the environmental that leads to global warming. The greatest strategy in these policies is the reduction of emissions of the greenhouse gases. A clean and sustainable environment is an essential commodity, not only to the investors but to each individual.
Non-renewable energy is associated with externalities, positive and negative, that are not highlighted in the market place. However, the negative externalities usually dominate the positive ones. Therefore, it is significant to embrace renewable energy such as wind energy. With the current change of things, the society has realized that wind energy among the top most promising new energy sources. Renewable energy could therefore, reduce the cost of energy to many firms and industries, hence able to increase their output. High aggregate output will subsequently boost the economic growth.
In an effort to meet a sustainable environment, government has to put measures to ensure that generation of renewable energy is highly placed. This will assist to eliminate the environmental degradation accompanied with emission of greenhouse gases and other non renewable source of energy. To ensure continuous economic growth, Investors should be highly encouraged to conduct their business in an environment that is free from hazards. Investments increases profit generation and the GDP of a country is increased.
Project Part 4: Fiscal Policy
Fiscal Policy tools and applications
The overview of fiscal policy is divided into two broad perspectives: the government purchases (spending) and taxes. The economy of a country has 2 primary fiscal tools; the revenue tools and the spending tools. The revenue tools are referred to as the taxes that are generated by the government using several ways. These taxes are classified as either direct or indirect. Direct taxes are the ones charged from the wealth of specific firms or individuals. Spending tools are either referred to as the increase or decrease in the government expenditure to impact on the economy. The government spends its expenditures in many ways: transfer payments, capital spending and current expenses.
The expansionary fiscal policy has three dimensions: an increase in government expenditures for goods and services, a decrease in the taxes charged and also the combination of the two methods. The two methods are combined so that there can be an increase in the aggregate demand and an expanding real output. This is meant to reduce the UE. The tools aim at reducing the high rates of unemployment amongst the citizens. Therefore raising the need of the government to increase the spending and reduce the taxes.
EU requirements for member countries
For one to qualify as a member state, the following requirements must be reached: the political aspect requires a country to have higher levels of democracy, ensure that human rights are not violated, respect the rule of law and ensure that the rights of the minority are protected. On the other hand, a country must ensure that they have a strong and a competitive market economy that cab compete with the rest of the member countries.
EU budget and sources of financing and outlets for the funds' use
The European Union budget is financed in the following ways: its own resources that are supported by other ways for revenue generation, expenditure based on revenue, availability of in-built schemes for compensating EU member countries. This means that the union accounts for 99% of its budget.
The EU own resources include traditional own resources, own resource from value added tax and own resource based on gross national income. The traditional own resources include the custom duties on imports from outside the EU and the sugar levies. The member states are charged VAT in a standardized percentage and they account for more than €14 billion. The VAT is charged 50% of the gross national income in each of the countries. The other sources of revenue include: taxes on EU staff salaries, contributions from non-EU countries to certain programs, fines on companies for breaching competition laws. (Dymond & Jonny, 2005)
Major differences between the U.S fiscal policy and that of the E.U. member
The U.S fiscal policy was based on a federal system in regard to fiscal transfers while E.U had the same system but only that it was small. This was a major difference as the E.U had to transfer funds to countries that had a financial crisis while the U.S had no need to transfer funds to those countries.
The E.U had a priority to pay down the debt of sovereign states while the United States emphasized in continuation of stimulus measures. The U.S also resisted some policies of the E.U. And this is evident as they opposed German attempts to ban naked short selling and this was considered a form of unilateralism. (Barnard & Catherine, 2007).
Fiscal policy as economic stabilization mechanism
In a nutshell, the fiscal stimulus is addressed so that it can deal with the decline in output the problem with rising unemployment. The policy is focused in increasing investments especially in the transport sector, infrastructure and the protection of the environmental.
Summary
Basically the two broad perspectives of fiscal policy tools are government spending and taxes. Taxes are further divided into two categories, indirect and direct tax. The forms of direct tax include: income tax, wealth tax, corporate tax, social security tax, estate tax and capital gains tax. The indirect taxes are charged on goods and services and they include sales tax, excise duty tax and value added tax.
The fiscal policy tools are beneficial in the following ways; they ensure that there is a tight security and implementation of proper infrastructure that leads to the positive growth of a country. Another advantage is that spending tools leads a decreased living standard that is affordable to a huge population. The subsidies that are offered in research help in policy making and projections in the future. The induce taxes will assist the government in fulfilling the fiscal needs.
The EU requirements are that, a member country must adhere to the objectives of the union therefore setting way for them to be participative in the administrative and judicial structures. Monitoring and close scrutiny is carried out to ensure that a state has the capacity to meet all the requirements. If so, the council of the EU sends an approval and a nation is now declared officially as a member of the EU.
In conclusion, most governments were in the frontline to adopt fiscal policies so that they could improve on their GDPs. The European economic recovery plan was a great channel for stabilizing the budgets of the countries.
REFERENCES
Rifkin & Jeremy, (2004). The European Dream: How Europe's Vision of the Future Is Quietly Eclipsing the American Dream. Jeremy P. Tarche.
Craig, Paul & Gráinn, (2007). EU Law, Text, Cases and Materials (4th Ed.). Oxford: Oxford University Press.
Scott & John, (2005). Industrialism: A Dictionary of Sociology. Oxford University Press.
Dymond & Jonny, (13 September 2005). "EU blasts Turkish author's trial". BBC News. Retrieved 6 July 2007.
Barnard & Catherine (August 2007). The Substantive Law of the EU: The four freedoms (2 Ed.). Oxford University Press. p. 447.
