Unchecked climate change presents a profound threat to economic growth and political stability, but despite widespread public concern, global emissions of greenhouse gases (GHGs) show no signs of declining. Indeed, current "business as usual" predictions imply that average global temperatures will rise by more than 4℃ by 2100, with potentially catastrophic results (Wagner and Weitzman 2015). Public debate about how to tackle this problem has largely focused on the adoption of some mix of pricing regimes. A large and lively literature has debated the relative merits of direct taxation versus some form of cap-and-trade regime (see for example Aldy and Stavins 2007), and currently there are nearly 60 such initiatives already in place or scheduled for implementation, covering around 20 percent of global GHG emissions (Henderson, Reinert, and Oseguera 2020). But global emissions have increased every year since the Kyoto Protocol, which committed developed countries to reducing their GHG emissions to 5 percent below their 1990 levels between 2008 and 2012, was signed. In 2015, at COP21 in Paris, 195 countries signed the Paris Accord, committing to reductions that, if executed, would hold warming in 2100 to about 3℃. But since then, only seven of the signatories have made plausible progress toward meeting their goals.
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