Unit 2.8·Microeconomics

Importance of International Cooperation

Market Failure: Externalities and Common Pool Resources

AO3

Syllabus requirement

Sustainability issues often require international coordination, which poses challenges in monitoring and enforcement.

Assessment objectives
AO3 Synthesis and Evaluation

Summary

This topic explains why international co-operation is necessary to manage market failures and common pool resources that cross national borders, such as overfishing and climate change. It covers the global nature of sustainability problems, challenges to reaching international agreements (cultural differences, economic incentives, monitoring and enforcement), and the practical costs of implementing and policing corrective policies. Understanding these issues matters because many environmental and resource problems cannot be solved by one country acting alone.

Real-world examples for this unit