In a side comment by Tim Worstall in his recent Forbes commentary, he says: “… if the social costs of climate change were clearly and obviously larger than the consumer benefits of CO2 emissions then we wouldn’t actually have a problem with climate change at all.” He says people would see the soical costs and stop using fossil fules.
That’s like saying smokers would stop smoking if they believed their collective habit raised national health care costs and caused premature death among their cohorts. People still smoke who believe this because human behavior is not so rational. Both of these are also examples of just how limited the logic of the market place really is. It’s limited because it relies on collective human behavior rather than human intellect for its logic. And this is precisely why we sometimes need government actions to supersede illogical market outcomes.