Stern Warnings on Climate

Smog hangs over the US city of Los Angeles

The much anticipated Stern Report on the Economics of Climate Change has been released. Much of what it will recommend are things that should be done anyway, global warming or not.

First. We should shift taxes from “goods”, such as work and savings, to “bads “, such as pollution.

Second. The European Union Emissions Transfer Scheme (EU ETS) is the biggest and most ambitious cap and trade system in the world. It is a shambles. Its purpose was threefold:

  1. cut emissions
  2. get polluters to pay for the damage they cause
  3. get industry to invest in cleaner technology

It has so far been a total failure. On top of that, billions of Euros worth of free pollution rights were given away to coal-fired power plants and some of the most polluting industries in Europe. We need accountability, and we need to get this scheme to work.

For comments on the Stern report, see Tim Worstall and Prometheus.

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