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Pricing externalities correctly just raises P, which leaves more fossil fuels in the ground. No need to berate OP for outlining a simplistic model of a market
by antisthenes 5y ago
Pricing externalities correctly just raises P, which leaves more fossil fuels in the ground.
No need to berate OP for outlining a simplistic model of a market solution. The hard part isn't creating the policy anyway, it's having the political capital to get it approved and put into law.
- imtringued 5y agoAs I said in a different comment. There isn't just P there is also C (as in cost to extract). P-C is your profit. Raising taxes increases C and thereby lowers the profit incentive to extract resources. The idea that the profit margin is fixed is stupid.