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THE BIGGEST
CHALLENGE FOR
COLLECTIVE
ACTION IS
CLIMATE CHANGE
ECONOMICS AND THE ENVIRONMENT
E
conomic development
and prosperity since the
Industrial Revolution have
come about through technology,
largely driven by fuels such as coal,
oil, and gas. It is increasingly clear,
however, that this prosperity comes
at a cost—not only are we fast
depleting these natural resources,
but burning fossil fuels pollutes
the atmosphere. A growing body
of evidence points to emissions of
greenhouse gases, in particular
carbon dioxide (CO 2 ), as a cause of
global warming, and the consensus
now among scientists worldwide is
that we risk devastating climate
change unless emissions are cut
quickly and drastically.IN CONTEXT
FOCUS
Economic policyKEY THINKERS
William Nordhaus (1941– )
Nicholas Stern (1946– )BEFORE
1920 British economist Arthur
Pigou proposes levying taxes
on pollution.1896 Swedish scientist Svante
Arrhenius predicts a doubling
of atmospheric carbon dioxide
will produce a 9–11°F rise in
global surface temperature.1992 The United Nations
Framework Convention on
Climate Change is signed.1997 The Kyoto Protocol is
ratified; by 2011 more than
190 countries sign up to it.AFTER
2011 Canada retracts from
the Kyoto Protocol.