Christian Gollier: How should Society be organized to fight climate change? The economics viewpoint

In order to win the world war against climate change, one will have to incentivize billions of people andentreprises to implement a myriad of micro- and macro-actions to reduce global emissions. The problem is that these stakeholders will bear 100% of the cost, and basically 0% of the benefits, which will mostlygoes to future generations. This so-called externality and free-rider problems have only one solution which is unanimously supported by economists. They propose to implement the polluter-pay principle by imposing a universal price of carbon that should be equal to the marginal climate damage. I will also discuss the alternative solutions.