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Global Warming Bonds
Andrew Zolli, 9 May 05

When it comes to solving the global warming challenge, a lot of the most innovative solutions are coming from economists. This makes sense as they deal in the science of human incentives. So what is it really going to take to get us to change our behavior?

Andrew Oswald, Professor of Economics at the University of Warwick, has come up with something quite radical: government-issued "Global Warming Bonds". These bonds would compensate individuals, companies and countries that cut fossil fuel emissions. The idea is that the bonds would start to pay out around the year 2045 and would be paid for by our grandchildren through taxation. Money makes the best persuader, argues Professor Oswald. Compensating individuals, companies and countries who cut emissions, with bonds that guarantee a steady stream of income in the future, would be a viable way of reducing global warming today:

On the face of it, it does sound harsh to require unborn people to pay for our excesses, but what's the alternative? We need to get our citizens to change their actions now. Future generations will be much richer than us anyway and if they were here, they would be happy to pass over some of their cash to get us to drive cleaner cars to take shorter holidays. Why not use some of their money through a global warming bond to get our citizens to change their actions today?

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Comments

>> Future generations will be much richer than us anyway <<

Nice assumption. If we can pre-empt the chronic energy shortages caused by peak oil plus increased demand; otherwise, future generations might be much poorer. Not to mention that some of us (globally) are not all that rich to start with.

John


Posted by: John Norris on 9 May 05

Great idea! And while we're at it, why not pay the grocer and the diaper service with bonds that our kids can pay back when they enter the workforce? After all, by Prof. Oswald's reasoning, future generations will be glad that they were clean and well fed during their early years.

On a more serious note, I agree that people often need incentives to change their ways. But it's a cop-out to push the cost onto future generations.


Posted by: Seth Zuckerman on 10 May 05

Nah. Ecomomiss working at think tanks and at trade organizations funded by wealthy stockholders in dinausaur industires are the ones testifying before Congress and writing op ed pieces for newspapers claiming that mandatory programs of any sort will bankrupt us. They're the ones keeping us in denial.


Posted by: John Laumer on 16 May 05



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