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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

Further Information

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The Debate is Over

    The debate over the existence of human caused global climate change is over.  After years of denial and debate over scientific authority and “proof” many have come to see it as a serious issue.  There are still skeptics, but if the 2007 state of the union address is an indicator, the concept has become mainstream.  President Bush’s acknowledgement of the existence of global warming was somewhat prophetic, if only because it meant that the “inconvenient truth” could no longer be denied.  The release of the fourth report from the Intergovernmental Panel on Climate Change claimed that current global warming is unequivocal and human caused with a 90% certainty .  Part two of the report, detailing the impacts on temperature and precipitation, indicated changes more serious than expected.  This build up culminated with Al Gore’s visit to Congress where, armed with a plan and a fiery oration, he implored Congress to take immediate and serious action.  At the present, Many bills confronting global warming have been proposed and are being debated in the halls of Congress.  There are many variations, but all use some sort of emissions trading scheme or tax regarding carbon dioxide and other greenhouse gases.  The subtleties of these different plans and the debate over their predicted results has become significant.

    As talk over cap and trade and carbon taxes grows, the need to understand these two economic strategies to address global warming has become essential.  The surge of global warming bills in Congress means that soon many individuals will have to make decisions regarding the advantages of one mitigation plan over another.  Making informed decisions will hopefully institutionalize a commitment to avoid the worst of the “climate crisis” and make progress with minimum economic and social cost.  With that in mind, this site will begin with two common challenges for this economic approach.  This will be followed by an overview of the case behind market intervention in environmental concerns.  From there carbon taxes and emissions permits, the two most prominent mechanisms for confronting global warming and their possible applications, will be described.  Attention will be paid to the unique challenges and advantages of each and where they have been tried.  These case studies provide a good basis to evaluate the actual operation of these schemes and how they can help address the impending challenge of our time: Global Warming.

Last updated:  2/2/2006


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