The WSJ reports that Nissan will be selling a new $3,000 car in the developing world. Depending on how the financing is set up (such as 10% down and 5% annual interest), many urban LDC families will be able to afford this product and transport emissions of CO2 will rise further. The article highlights that the vehicle does not have a power engine nor does it have airbags. In my own research, I have studied how developing nations import used vehicles from richer nations as a source of car supply. For those who teach economics, this is an interesting example of how the introduction of a new good (the Nissan) can offer large private benefits but impose social costs (the carbon dioxide). This is another example of why I started to write about the economics of climate change adaptation. The developing world is going to create a lot of GHG emissions over the next 50 years.
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