chapter  6
30 Pages

Pricing pollution: of truth and taxes

Prices matter. If there is one lesson from the entire history of economic development (and thought), that pretty much sums it up. If all ‘economic agents’ – the technical term for you, me, corporations and institutions like government when they buy and sell things – had good foresight and were economically rational (together with a few other key assumptions), then indeed prices would eclipse all other factors as the determinant of our energy consumption and its environmental impact. At least on the surface, policy-making would be easy.