David D. Friedman, Santa Clara University (CA): Climate Change, Population, and the Problem with Externality Arguments

Abstract: The existence of externalities provides a legitimate economic argument for government intervention to alter market outcomes. In cases such as population growth and climate change, however, there are both positive and negative externalities spread out over a long and uncertain future, making not only the magnitude but the sign of the net externality uncertain. Externality arguments can then be used to support whatever policies those making them prefer, with uncertainties resolved to give the desired result.