Home > John's Blogs, Politics > The Economics of Global Warming

The Economics of Global Warming

If you are trying to understand the economics of global warming, as well as various policy choices that can be made, this post is a great start.  The author worked for the Bush administration, and spells out the policy choices for global warming in a clear and concise way.  You may not agree with him (I didn’t), but it’s very helpful.

Essentially, if you think we are obligated to slow or halt global warming, then you have to address the India/China problem.  They aren’t interested.  So the author gives three options for handling that:

What tools should we use to try to convince the government of China to impose a positive carbon price as part of a global effort?  (choose one or more)

  1. Leadership:  U.S. goes first and self-imposes a price.  Then we use diplomacy to try to convince the Chinese to do the same.
  2. Carrots:  The U.S. pays the Chinese to reduce their emissions.
  3. Sticks:  The U.S. imposes import tariffs on Chinese goods as long as the government China does not impose a carbon price.

So, what’s his answer? None of the above. But read it to see why.

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