Economists believe that something scarce should be priced based on what someone is willing to pay for it, and that there are various systems in place to price carbon dioxide accordingly. However, these prices do not match the perception of value by most people, who see no cost associated with emitting CO2. Economists argue that though the emitted carbon dioxide does harm to the environment, its negative effects must be taken into account when determining its true value, which they estimate through modelling. The use of these models in policy-making is also discussed as an example of how this information is used to inform decisions about fuel standards in America.
Read this story from "The Economist" for free without being tracked.
#Economics #ClimateChange #EnvironmentalPolicy