Belfer Center, Kennedy School, Harvard Univ. /by Joseph Aldy and Robert Stavins
http://bit.ly/sJip4i
In a modern economy, nearly all aspects of economic activity affect greenhouse gas – in particular, carbon dioxide (CO2) – emissions, and hence the global climate. To be effective, climate change policy must affect decisions regarding these activities. This can be done in one of three ways: (1) mandate businesses and individuals to change their behavior regarding technology choice and emissions; (2) subsidize businesses and individuals to invest in and use lower-emitting goods and services; or (3) price the greenhouse gas externality, so that decisions take account of this external cost…
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