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How Smart Economics Can Save the World

by Gernot Wagner

Pub Date: Oct. 5th, 2011
ISBN: 978-0-8090-5207-3
Publisher: Hill and Wang/Farrar, Straus and Giroux

Let economists rule and the earth be spared.

Environmental economist and debut author Wagner points out that no degree of personal environmental awareness will avert the global-warming chaos humanity now faces. With perhaps as little as a decade left for planet-saving action, it’s going to take the combined cool-down actions of several billion people to make a difference. He argues that at this late date only an immediate, economist-driven redirection of market forces will make that happen. Call it cap and trade, new taxes, emission-reducing regulatory policies or outright bans on the worst contaminants, but the goal will only be achieved by putting a true cost on dumping in the atmosphere. The price of further atmospheric insult has to be high enough so that individuals by the billions, corporations and governments will do whatever it takes to avoid paying. Therein lies possible salvation, writes the author, whose light, quasi-witty touch belies the apocalyptic message, one that is hardly his alone. But he doesn’t sound like he’ll be storming the barricades, and even admits that we still could get lucky due to unforeseen vicissitudes. The population bomb of the 1970s, for example, turned out to be something of a dud, at least in wealthier countries. Wagner also cautions against sweeping environmental actions that turn out to be flawed. Phasing out incandescent light bulbs to save electricity and cut down on power-plant emissions doesn’t look so smart, he writes, when we consider that the replacement bulbs, those energy-efficient compact fluorescents, contain environmentally troublesome mercury.

Great plans, but do the economists have an army?