Can Economics Address Climate Change as part of Sustainability?

As an economist, I'm interested in exploring the possibility that economics can guide policy on climate change.  Though, I'm skeptical that it's up to that challenge.

Climate change is perhaps the ultimate common-pool resource problem.  As you might imagine, I'm not the only one who has looked at these issues - sustainability and climate change - as a common-pool resource problem.  Click here for a paper on this topic.

I'm not sure that economics can handle this problem.  I'm darn sure it can't handle it it's own.  Though, the problem is a classic common-pool resource problem.

It falls into that group of problems since the earth's ability to sustain life is determined by how much CO2 is in the atmosphere.  Therefore, there's a maximum amount of that stuff that can be sloshing around and life as we know it can be sustained.  Another character of the problem is no one person or country 'owns' the right to that carrying capacity.  If it was owned, and the ownership could be economically enforced, then we could talk about husbanding that resource using markets.  Since it's impossible to economically police ownership, there needs to be some scheme that is a reasonable substitute.

Working to find that reasonable substitute has been what's been going on at the Climate Conference in Copenhagen.  How that conference went is a testament to how difficult this problem really is.

In principle, though, this problem is no different than managing a fishery or managing oil extraction from a field.  We've been dealing with those types of problems for decades.  What sets this problem apart from those is it's scale.  We're talking about all actions in all countries around the globe.  Even so, I do think that framing this issue as a common-pool resource problem helps to highlight key challenges and what are some key issues.  I'll address what I consider key challenges and issues in a separate post.

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