Full Title: The Case for Carbon Pricing
Author(s): Alex Bowen
Publisher(s): Grantham Research Institute, Center for Climate Change Economics and Policy
Publication Date: January 1, 2011
Full Text: Download Resource
Description (excerpt):
The case for carbon pricing rests on the economic analysis of ‘externalities’ – circumstances where the effect of production or consumption of goods and services imposes costs or benefits on others that are not reflected in the prices charged for those goods and services. This case is laid out in Section 2. Having established the case for carbon pricing, Section 3 tackles the challenge of deciding what the price should be. In Section 4, the practical policy question of how to introduce a carbon price is addressed. Carbon pricing affects the distribution of income and wealth as well as the incentives to emit greenhouse gases; some of the issues to which this gives rise are discussed in Section 5. Section 6 develops the argument that, while other policies are needed too, in particular to promote innovation and energy saving, it would be a big mistake to rely on them alone to halt human-induced climate change. Section 7 concludes.