Pricing Nature 2. What’s the Right Price for Carbon Emissions?
Feb 22, 2021
In this engaging discussion, Nobel laureate William Nordhaus, a Yale economics professor, delves into the complexities of pricing carbon emissions. He explains the social cost of carbon and its relevance for public policy and future generations. The challenges of predicting climate change damages are explored, highlighting the ethical dilemmas in discount rates. Nordhaus also contrasts market-driven behaviors with moral imperatives in carbon pricing, providing insight into the ongoing debate over achieving a balance between immediate economic gains and long-term environmental sustainability.
AI Snips
Chapters
Books
Transcript
Episode notes
Dumping Costs Hidden Over Time
- Casey Pickett shares a childhood story about a wooded riverbank used as a free dump for cars and other waste.
- Decades later, his family must clean up the pollution, illustrating the hidden costs of pollution like carbon emissions.
Understanding Social Cost of Carbon
- William Nordhaus defines the social cost of carbon as the harm from emitting one ton of carbon dioxide on society now and in the future.
- Pricing carbon accounts for the external costs not reflected in market transactions, making carbon emissions cost society economically.
Carbon Cost as Global Accounting
- Fran Moore explains the social cost of carbon as an accounting exercise aggregating all global damages caused by one ton of CO2 emissions.
- The result is a dollar figure quantifying the aggregate economic impacts caused by that one ton of emissions.
