Tuesday, May 19, 2009

Carbon Taxes to Reduce Hot Air

Tim Harford, one of my favorite economists, just reviewed David J.C. MacKay's new book Sustainable Energy – Without the Hot Air. MacKay is a Cambridge physicist who analyzes the physics of various renewable energy sources to see how they can help reduce climate change. Short answer: No. But, read the book or Harford's article for the long answer.

Armed with a knowledge of the physics of renewable energy, it is clear as Harford points out:

Dealing with climate change will need many small decisions to be made differently. The government cannot micromanage these. This is why a carbon price, whether set through taxes or emissions permits, is needed. It is not so much a nudge as a shove in the right direction.

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