Grantham Seminar | How a minimum carbon price commitment might help to internalize the global warming externality

Grantham Seminar introduced and chaired by Prof. Simon Dietz, Co-Director of the Grantham Research Institute

Prof. Martin L. Weitzman, Professor of Economics at Harvard University, will be the speaker for this event.

It is difficult to resolve the global warming free-rider externality problem by negotiating many different quantity targets. By contrast, negotiating a single internationally-binding minimum carbon price (the proceeds from which are domestically retained) counters self-interest. A uniform price embodies “countervailing force” against free riding by automatically incentivizing parties to internalize the externality via a simple understandable formula that embodies a common climate commitment based on principles of reciprocity, quid-pro-quo and I-will-if-you-will.

The talk is somewhat technical, being centered on a mathematical model. Some implications will be discussed.