Tuesday, 5 November 2013

The OECD and Carbon Pricing

The OECD released a report entitled Climate and Carbon, Aligning Prices and Policies.

As anyone would know if they have studied economics they support a policy of either a Carbon Tax
( joining the Pigou club as Greg Mankiw would say) or some sort of Emissions Trading Scheme to reduce  carbon emissions.

Thus the externalities have a price put on them and then the market directly or indirectly changes consumer's buying habits.There are other policies that are needed as well but a country must adopt one or the other of the above.

If a country does not do that then that country is either not serious about climate change or simply doesn't believe that AGW is occurring.