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  • Writer's pictureTom Mast

Global Warming and Economics

Updated: Nov 2, 2022

Tom Mast – Founder of Solve American Gridlock

Reference: The Climate Casino; Risk, Uncertainty, and Economics for a Warming World,

By William Nordhaus

The referenced book above was written in 2013, and it is still very relevant for a deep understanding of how intertwined are global warming science and economics. Nordhaus was one of two recipients of the Nobel Memorial Prize in Economic Sciences in 2018 for “integrating climate change into long-run macroeconomic analysis.”

Assuming we are serious about mitigating the long-term negative effects of global warming caused by greenhouse gases collecting in our atmosphere, gases attributed primarily to our use of fossil fuels to better our lives, the US and the world must plan and execute some massive changes in approach. These changes largely affect fossil fuels which just happen to be the bedrock of our food supply, transportation, construction, manufacturing, heating and air conditioning, a myriad of labor-saving devices, and much more.

We are beyond the point of preventing any effects of global warming in the decades to come. Scientists have done a remarkable job of estimating the negative impacts on humanity of various future temperatures, and economists have done equally good work in estimating the future costs of these impacts as well as the price society will have to pay in the nearer term to obtain certain levels of mitigation – benefits. Economists know how to balance various scenarios of these costs and benefits to provide choices in developing a realistic plan.

Economics makes two arguments: First, consumers and organizations must have an economic incentive to make needed changes, and the first step is increasing the price of everything that uses fossil fuels – a carbon tax. The monies collected by government can be returned to the people in a way that retains the disincentive to consume fossil fuels. Second, both in the USA and the rest of the world, governments must pass laws and treaties that ensure all the actions taken fall fairly on everyone.

The ad hoc actions taken so far against global warming have not produced wide and fair acceptance, and the results as indicated by greenhouse gas emissions are the proof. We must form a commission of scientists, economists, and other specialties to formulate a Master Plan that will be supported by the US and other governments, one that uses carbon pricing as the fair way to stimulate the millions of decisions, large and small, required for success.


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