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Free Market Strategies to Confront Global Warming


The debate is over

Challenges to the Economic Approach:

The Case for Market Intervention

Free Market Strategies

Carbon Taxes

Emissions trading: Cap and Trade

Economic Adaptation
-A Practical Application
-A Comprehensive Approach

Further Information

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Economic Adaptation

A Practical Application

    While CO2 is a pollutant and can be regulated in ways similar to previous schemes, the scale of any program will be much beyond any program that has already been conducted.  Even beyond the challenges of scale, any market strategy has many kinks and will need to be altered over time.  This is also different because all fossil fuels contain some degree of carbon dioxide and emit it when burned, so to say that we are cutting carbon emissions doesn’t just mean we’re decreasing fossil fuel use, but also transitioning to non carbon emitting sources of energy.  The regulation will require a great deal of regulatory action and a lot of calculations and testing to determine the best program to reduce emissions.  The categories of tax vs. trading scheme can be blurred as well, hybrid programs incorporating elements of both might allow for the best of each method to be maximized.  The program will be heavily influenced by political decisions, since carbon policy affects everyone.  Finding an effective solution will require both technical prowess and testing, but political courage on the part of all.

"Mitigation - taking strong action to reduce emissions - must be viewed as an investment, a cost incurred now and in the coming few decades to avoid the risks of very severe consequences in the future. If these investments are made wisely, the costs will be manageable, and there will be a wide range of opportunities for growth and development along the way. " –The Stern Review

A Comprehensive Approach
A problem on the scale of global warming will require a commitment of many people and strategies to address.  Not one solution will solve the problem.  A well-designed economic approach will hopefully create incentives that reflect the goal of addressing global warming, but they do not act independently. The most effective way to address the problem is to have interplay between economics and culture, where economic incentives promote social goals and give people the freedom to act in mutually beneficial ways.  Important to all aspects of a movement to confront global warming is the understanding that we are not sacrificing our quality of life or diminishing our economy, we are investing in the future and both will be better off for it. 

Last updated:  2/2/2006


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