This is a fascinating comment in the Economist. It seems obviously wrong, and (they claim) an opinion held by an entire profession. A carbon tax seems like a very good way of partially solving the problem...pic.twitter.com/41WyHKuIjZ
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Me too. Point taken. Nevertheless, massive interventions are risky. And increasing taxes increases our vulnerability to the next emergency. Are we going to meet them *all* by increasing taxes further?
I'm sympathetic to that argument. However, I think it's at least plausible to want Pigouvian taxes whenever there's a negative externality. But that leaves the Q: how on earth do you compute the marginal damage / tax rate? The standard approaches seem v. unsatisfying.
An argument for why "one big idea" can work: it makes it profitable to do a thousand other direct solutions/substitutes. That's main argument for a carbon tax Eg. often exists a second lower-carbon option, that isn't used because it's a bit more expensive. Carbon taxes flip that
I don't think anyone (well, certainly not me) is arguing that a carbon tax isn't likely to help. It's trusting in it as a silver bullet solution. Yeah, maybe it'll be a silver bullet, but I don't think it's plausible as a near certainty.
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