Economics in the Service of the Environment

Everyone seems to have a highly charged opinion about whether stopping Global warming and its effects is a policy that is worth pursuing. The global nature of the challenge is one of the reasons that hammering out sensible responses is difficult. Whereas consensus on the causes of global warming is still being debate on the fringes, that it is an empirical fact is irrefutable.

Dependence on petroleum fuels largely for generating energy on the one hand and for fueling automobiles makes it imperative that prescriptions that deal with ensuring the cost of increased driving must now be paid by motorists. Professor Edward Glaeser of Harvard University presents a well-argued and pithy piece in the Boston Globe addressing the need to consider the costs against the benefits of environmental policy in order to ensure sound and effective policy responses.

The two most profound points in the argument are the indispensability of a carbon tax to ensure that polluters pay the real cost of the externality of pollution on the one hand, and the need to offer large public prizes that reward innovations that could then be utilized throughout the planet.