Must read article by Paul Krugman on environmental economics

[karynnj]

This is a 10 page, very readable article that goes through the economic theory of how to deal with climate change. This provides the most easily understood theoretical underpinning for the various proposed alternatives. It is actually fun reading - a near impossibility given that it is a serious discussion of the issue.

It is not easy to excerpt from so I will just give the link:
http://www.nytimes.com/2010/04/11/magazine/11Economy-t.html?pagewanted=1&partner=rss&emc=rss


It was interesting reading this after reading the disappointing article that the World Bank approved a $3.75 billion loan to a South African company to build a large coal burning power plant. In the articles on it, several points were made:

1) The US abstained from the vote because of environmental concerns.

2) Kerry, representing SFRC, Leahy, representing Senate Appropriations Subcommittee on Foreign Operations, and Frank representing House Financial Services Committee wrote a letter with concerns about it.

3) Representatives Gregory Meeks, Bobby Rush, William Lacy Clay, Jack Kingston, Donald Payne, Yvette Clarke, Maxine Waters and Sheila Jackson Lee wrote a letter supporting it because of the needs of people to have power in that area.

Here are two articles on that:
http://www.businessweek.com/news/2010-04-05/u-s-lawmakers-raise-concern-about-world-bank-loan-to-eskom.html
http://www.nytimes.com/cwire/2010/04/08/08climatewire-us-to-abstain-on-south-african-coal-plant-51068.html

Kerry's comment on approval was:

“There are better ways to promote urgent energy access in the developing world without exacerbating the looming threat of catastrophic climate change which will ultimately hit Africa and the developing world the hardest,” Sen. John Kerry (D-Mass.) said in a statement released Friday morning.

“Moving forward, the World Bank should be leading the way by leveraging its funding and broad expertise to promote new, low carbon footprint energy sources that mitigate climate change.”

http://thehill.com/blogs/e2-wire/677-e2-wire/91329-kerry-knocks-world-bank-coal-loan

This issue was one of several discussed at this hearing:
Kerry asked Tim Geitner on this dilemma starting at about 46 minutes in. His not voting for the loan was consistent, if a bit weak, compared to his answer to the committee.

http://foreign.senate.gov/hearings/hearing/20091117_3/