Can markets solve global warming?

Gristmill has a couple of interesting blogs on a recent pronouncement from JK Galbraith, who’s been peering over his glasses at a number of conundrums including whether markets can solve global warming.
One of his suggestions is

Mandates force the pace of technical change, lower unit costs, and help businesses with their own plans for technical transitions. Plans provide clarity and reduce risk, an essential step in making things happen. Of course, planning can be authoritarian, and planners make mistakes. Much of what goes into a national plan, especially at first, may be wasted. But so what? Waste and inefficiency are part of human endeavour, and markets do not protect against them.

There is not a free market in biofuels. The US and European Union are two trade blocs at least that have tariff walls designed to protect inefficient indgenous producers of biofuels. Not only in terms of surcharges on biofuels into countries (54c/gal on Brazilian ethanol into the US) but subsidies to farmers (corn and sugar). The market might work given time if these were dismantled and if people were prepared to look at the possibility that a web of mutual need could ensure supply security. This could see third world biofuel producers and farmers benefit considerably from access to the large markets of the north.

The United Nations’ Food and Agriculture Organisation wants a high level global meeting next June to try and find a way forward. Ideologically it is wrong to say always that planning is a bad idea surely some elements of national infrastructure such as roads (The interstate road network did not develop by itself after 200 years of independence, but by legislation) and energy transmission (UK National Electricity grid) need to be planned, to some extent.Legislation can shape the landscape in which society operates. If there is not the political will to increase fuel efficiency and home insulation then any change in these directions will be slow unless an external force (high oil prices imposed by third countries for example) encourages people to make changes in that direction.

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