Tuesday, February 3, 2015

Pricing externalities

In class we're about to get to the idea of incorporating environmental damage into supply and demand curves. One way to do this is to have taxes and fees represent the damage being done, and in a blog post today by the World Bank, the leader of PGE (a power company in California) recommends doing so in the form of a carbon tax. This idea was mentioned earlier in the blog by David Zilberman, and it's an idea that economists have been pushing for decades or more. Here's to hoping that with industry report it can become a reality sooner rather than later!

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