If I were dictator of the world and wished to maximize economic efficiency, the answer would be fairly obvious. Impose a tax on activities that create greenhouse gases designed to reflect the marginal cost they create. That is the standard economic solution, due to Pigou, for problems of negative externalities. Since the tax brings in additional revenue, combine it with a corresponding reduction in whatever taxes currently have the largest adverse effects. To begin with, they would not be based on a realistic estimate of the marginal costs; insofar as they would be based on anything, judging by past arguments over Kyoto and similar proposals, it would be a target level of temperature. If the level of taxes needed to hold warming down to the target level turned out to be much higher than the marginal damage done at that level, as it well might be, we would be buying lower temperature at a price higher than it was worth. I offer as further evidence the arguments I have had over the...
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