Environmental Science
Externalities of Climate Change on Global Economic Policy
Quick fact
Economists have shown that the social cost of carbon—the economic damage caused by each ton of CO₂ emitted—is far higher than the market price of emitting it, which is currently near zero. This gap represents one of the largest externalities ever identified, prompting global policy responses.
Why this is interesting
Every time a factory burns coal or a car burns gasoline, the climate changes for everyone on Earth—yet the fuel price doesn't reflect that damage. Why do these costs fall on everyone except the polluter, and how are governments trying to fix that?