Reading for Wed. September 14 Read the assigned pages of the following article and bring the pages to class on Wed. Review the discussion questions below.

atkinson-etal-2010-econ-climate-change_theories1

Read pages 1-12 of the article. The authors explain various economic assumptions that are at the center of different climate change policy proposals. They contrast these theories – Neoclassical economics, Keynesian economics, and Innovation Economics.

Be prepared to participate in a class discussion of the following questions:

1. What do neoclassical economists believe are the central issues to resolve in addressing the challenges of climate change? What assumptions does the theory make?
2. Do you think the assumptions made about human economic behavior and about how to address environmental problems are workable in the real world economy?
3. What do neo-Keynesian economists view as most important in addressing the challenges of climate change? Explain how the neo-Keynesian perspective differs from the neoclassical perspective.
4. What are the principal problems that Atkinson and Hackler have with the neoclassical and neo-Keynesian policy proposals for addressing climate change? What arguments do the authors cite as to why neither the neoclassical nor the neo-Keynesian views offer an suitable policy framework for addressing the climate challenges of the 21^st century?
5. The authors discuss what they call “Innovation Economics.” What is ‘Innovation economics’ according to the authors?

II. Read the short article (one pg) here by the IETA. 

Why Emissions Trading is More Effective Than a Carbon Tax_IETA

1. What policy does the International Emissions Trading Association advocate for addressing climate change? Why does the IETA believe this policy is workable?What is “cap and trade”?