A July 20 env-econ post offered this:
Nobel Prize winning economist Joseph Stiglitz in an The Economists' Voice piece offers energy tariffs as a solution to countries that free ride on climate change.
A letter in reply has appeared in the Economists' Voice: What Will Stiglitz’s Global Warming Remedy Really Cost?
Harry Saunders begins with this:
Joseph Stiglitz’s proposal for a global emissions tax is a visionary one, and by everything that is sensible should be heeded in the pantheons of power everywhere. However, I am very troubled by his claim that “[t]he economic cost to each country is small—in some cases, actually negative,” since the “deadweight loss” will be small. It is not at all clear
this is true.
And ends here:
The Stiglitz proposal is based on solid and artfully-articulated economics, which should be no surprise given its source. It has the overwhelming feel of the right answer. Global welfare calls for internalizing this costly externality. However, we owe it to the public, as well as to the economics profession, to be realistic about the level of pain required to implement it.
In the middle he says that there is no free lunch. Policies that are directed towards mitigating climate change might be painful.
