November 30, 2008
Environmental economics 101
Posted by
Mark Kleiman
Megan McArdle puts it in a nutshell:
There is no such thing as a free market approach to air quality or water rights.
But, as Megan (quoting a Matt Yglesias post I can't find) point out, some form of greenhouse gas tax or cap-and-trade system is as close as we're going to get. Since neither "no pollution" nor "unlimited pollution" is an optimum, some mechanism has to decide how much pollution to allow, and who gets to emit it.
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