MacDonald on Climate Change

Glenn MacDonald, a professor in Business Economics and Strategy here at Olin, became a guest blogger at Orgnizations and Markets. He shared his views on Climate Change and how to reduce carbon emissions from an economic perspective. Excerpts from his post:

"... there are two fundamental economic forces at work. One is that emissions are a classical prisoners’ dilemma...Second, tastes for amenities such as clean air appear to be normal goods, maybe even luxuries...thus, efforts to reduce emissions will grow as more and more countries prosper sufficiently that their inhabitants are willing to forgo consumption for cleaner air, etc. So, from an economic perspective, the most realistic way to fewer carbon emissions and (per my assumption) less climate effects is through the aggressive promotion of activities that promote growth: free trade, democracy, economic freedom, reduced taxes, regulations and tariffs, protection of property rights. . . . Interestingly, freeing individuals to pursue their interests is likely the best practical/realistic approach to what, at first blush, seems like a classical case for collective action. "