The Poverty of Climate Economics

Mark Sagoff

in The Oxford Handbook of Climate Change and Society

Published in print August 2011 | ISBN: 9780199566600
Published online January 2012 | | DOI:

Series: Oxford Handbooks in Politics & International Relations

The Poverty of Climate Economics

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The intergeneration aspect of climate change makes economic reasoning about it more problematic than one might think. Economic reasoning looks for ways more efficiently to allocate or exchange property rights and — sometimes by determining those rights — to resolve collective action dilemmas. This article reveals that economic theory cannot provide a useful way to think about climate change. Climate change is not a collective action problem because individuals today have no common interest that would lead them to believe they have more to gain overall as individuals from the restrictions placed on others than they have to lose from accepting those restrictions themselves. It argues that an efficient allocation of resources, since it depends on exhausting the benefits of trade among the people who can trade (the living), cannot in any direct way respond to the needs or interests of future generations. An efficient policy therefore cannot be a sustainable policy.

Keywords: climate economics; market failure; allocation of resources; economic reasoning; greenhouse gas

Article.  6315 words. 

Subjects: Politics ; Political Economy ; Public Policy

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