We envision the creation of a climate liability market to address climate change. Each period, countries would be made liable for their past responsibility in current climate damage. We show that this yields the same first-best incentives to reduce emissions as a Pigovian tax. Also, because...

The Polluter Pays, Then Receives (PPTR) principle claims that, had an agent innocently benefited from climate change, it owes moral obligations to the polluters who contributed to a warmer globe. This critical review assesses the evidence, the externalities argument, and the luck egalitarian...