If greenhouse gas emissions are not cut, climate change could have very large future costs. Lets assume

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If greenhouse gas emissions are not cut, climate change could have very large future costs. Let’s assume that there are 100 equally sized countries in the world and that cutting greenhouse gas emissions will cost each country 10 but will create much larger world benefits of 500. Since the benefits of cutting greenhouse gas emissions far exceed the costs, why isn't climate change in this scenario an easy problem to solve?

a. If a country cuts its greenhouse emissions, what are the costs to that country? 

b. If a country cuts its greenhouse emissions, what are the benefits to that country?

c. Since the costs are _______ [greater than/smaller than/equal to] the benefits, a country has an incentive to _______ [cut emissions/free ride].

d. Cutting greenhouse gas emissions is difficult because it is a global _______ because benefits are _______ and _______.

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Modern Principles Of Economics

ISBN: 9781319245399

5th Edition

Authors: Tyler Cowen, Alex Tabarrok

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