Climate Problems: Market and Ethics

The climate crisis is the major global problem of our time. As markets like those for energy have had a crucial role in the development of this problem, their management is a crucial precondition for its resolution. However, this is far from simple in light of classic market failures in respect of, for example, externalities and public goods. This is not a matter of short-term effects but of longer-term impacts lasting decades and centuries. This raises ethical issues about relations between the generations, and thus long-term sustainability. As a global problem, the climate crisis also requires international burden-sharing. Finally, the uncertainties involved are huge, especially in assessing the various tipping points. The role of economics and ethics in handling these problems is the topic of this chapter.