Addressing Climate Change Through Price and Non-Price Interventions

Economists have had a long predilection for price interventions to correct market failures. Recognizing the importance of the second-best nature of economies, the Stern-Stiglitz High-Level Commission on Carbon Prices report (2017) departed from the recommendation of a single carbon price for all uses at all places and all times. In a Roosevelt working paper, Roosevelt Chief Economist Joseph Stiglitz provides some of the analytics behind these recommendations and examines the circumstances in which a deviation from the “single price” might be desirable and the form that such deviations might best take.