By Azra Thakur
The New York Times recently ran an article by Paul Krugman, "Building a Green Economy," where Krugman explains his support for market interventions that will help "build a green economy." He presents an overview of the history of environmental economics and legislation, the scientific consensus surrounding global warming to counter those who insist its nonexistence, the cost of implementing a "green economy" and the cost of failing to implement change all on a national and international level.
Krugman explains the connection between "economic actors" and society that exists within the market economy requires intervention to alleviate "negative externalities"--carbon and greenhouse gas emissions, for instance--that occur:
"When there are negative externalities -- costs that economic actors impose on others without paying a price for their actions -- any presumption that the market economy, left to its own devices, will do the right thing goes out the window. So what should we do? Environmental economics is all about answering that question."
Krugman also relays the importance of having the United States and Europe assume leadership surrounding the "green economy" and use their position to influence other countries to enact efforts to reduce climate change, primarily through cap and trade market incentives. Krugman cites Harvard's Martin Weitzman, who argues the risk for inaction outweighs the concern for "cost-benefit calculations":
"Weitzman argues -- and I agree -- that this risk of catastrophe, rather than the details of cost-benefit calculations, makes the most powerful case for strong climate policy. Current projections of global warming in the absence of action are just too close to the kinds of numbers associated with doomsday scenarios. It would be irresponsible -- it's tempting to say criminally irresponsible -- not to step back from what could all too easily turn out to be the edge of a cliff."