Global Warming: Technology, Preferences and Policy

Summary Global warming is a market failure in that the market prices of goods do not reflect the externality imposed on us all by the green house gases (GHGs) emitted in their production. To date global politics has not provided an effective agreement on how to abate these emissions. Over and above market failure there is political failure. A proper understanding of this fundamental institutional failure requires us to consider the interaction between producers, consumers and politics. We aim to offer a brief introduction to some of the issues involved and point to an evolutionary analysis in which technology, preferences and policies coevolve.