Is Government Action Worse Than Global Warming? Why Policy Nihilism May Be the Only Rational Response to Climate Change

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WILL THE SOLUTION to global warming be worse than global warming itself?

Man-made global warming occurs as a result of burning fossil fuels, which releases carbon dioxide into the atmosphere. It's a negative externality--a spillover from an economic transaction that harms parties not directly involved in the transaction. In this case, the carbon dioxide released into the atmosphere is thought to be boosting temperatures, raising sea levels, and having other effects on the climate that people must adapt to (by using more air conditioning, switching crops, and so forth). Because of these spillover effects, the argument goes, the price of fossil fuels does not reflect the full cost of consuming them.

Ideally, once the full costs of man-made global warming are calculated, consumers, businesses, governments, and international agencies can adopt policies that take those burdens into account. The two policy options most widely discussed for setting a price on carbon dioxide are carbon taxes and cap-and-trade …