How Changing My Economic Model Made Me a Climate Change Optimist

Let’s start by assuming climate change is real and that the primary cause is fossil fuels, because those two things are true. The question is how to stop it. What most of us thought we knew about this is now wrong, and that is a very good thing. The neo-classical model. I used to think that climate change was a classic case of market failure resulting from a negative externality. Polluters got the economic benefit of fossil energy without having to pay the social cost, and would hence use too much of it. Fixing it required polluters to bear the social cost of CO2, a price on carbon. ….[READ]