What is your understanding of the neoclassical perspective as presented by the authors? What are the assumptions about human economic behavior?

The neoclassical economics’ focal point is to establish the prices and productivity, revenue from the markets in the course of supplies and demands. The author’s neoclassical perspective is based on cap and trade solution which appealing to pure exchange. “For example, the cap on coal-based energy providers/producers would require them to reduce carbon emissions, and providers would be able to trade credits among themselves and with other energy producers.”The assumptions about human economic behavior are that people endeavor to make the most of outcomes as precise by their limited resources. People always want more, it’s the nature.

The authors discuss what they call “Innovation Economics.” What do Atkinson and Hackler mean by innovation economics? Describe their perspective.

Innovation economics is to remove deficiency sources in the outside market. By doing innovation, which has possible to improve any imperfections technology changes, economy growth and as well as introducing clean energy innovations to the world. “Facilitating such innovative actions, improving productive and adaptive efficiency, and supporting a clean energy innovation system require a variety of policy tools to grow the economy in a strategic zero-carbon direction.”

1. What is your understanding of the neoclassical perspective as presented by the authors?

My understanding if the neoclassical perspective as presented by the authors on the issues at hand, is that there is a “straight forward,” monetary exchange between emitters of (GHG) for their emissions by means of a simple tax, such as a carbon tax.

2. What are the assumptions about human economic behavioral?

I believe that the assumptions about human behavior in regards to this purposes solution is that once their is a favorable monetary value, the markets will react favorably and lead to development of the necessary technologies.

3. What is your understanding of the neo-Keynesian perspective?

In contact to the neoclassical approach, the neo-Keynesian perspective is to instead create a emissions cap, and create subsidies for renewable energy technologies that contribute to renewable energy portfolio standards.

4. How does it differ from the neoclassical perspective?

The neo-Keynesian approach eliminates the need of a middleman and situational tactics of neoclassical, such as depending on how the market would respond to a carbon tax. Also by I stilling a (GHG) emissions cap, it creates a ceiling, which can be beneficial for regulations and pricing. Also there is an aggressive change to the necessary technological advances, compared to neoclassical.

5. What do neo-Keynesian economists view as the most important policies to address the challenges of climate change?

Neo- Keynesian economists view that, “price signals alone are insufficient to drive clean energy transformation and that carbon taxes that explicitly support clean energy innovation policies to spur research, development, and deployment of next generation alternatives are the preferable solution.”