The Unassuming Economist

From a paper by Behnaz Minooei Fard and Willi Semmler:

“In some academic and policy circles, carbon pricing, generally in the form of Cap & Trade or carbon taxes (see Metcalf and Stock (2020)), is often seen as a key strategy for tackling climate change and its associated risks. Others support directed technical change and direct investments in cleaner energy sources (see Acemoglu et al. (2012) and Aghion et al. (2022)). One can design theoretical and model-guided strategies and efficient or optimal paths to decarbonization of the economy. Politically, however, one of the most important issues is that significant behavioral constraints exist in actual policymaking. This paper provides an overview and survey of the strengths and weaknesses of either side of the decarbonization strategy and the role of behavioral drivers toward a low-carbon economy, assessed from the macro and microeconomic perspectives.”