The straightforward - but not easy - solution is to ask governments to assess a charge on each sold item that brings the price in line with the full cost to society.
Note that market failure does not mean that the “market” mechanism is the cause of the failure - rather the issue is the incompleteness of information. Markets would solve this allocation problem very efficiently once the subsidy is removed. I imagine for example that most packaging using non recyclable plastics would become entirely uneconomical, and the full price of gas would be so high that industry will be incentivized to look for alternative technologies and sources of energy.
- super rich people have super large footprint (extremely large houses, gas guzler vehicles, private jets, etc.... Since humans are humans, they try to imitate people from the top.
- the whole SUV thing (restriction on gas consumption -> people buying trucks with sit in them -> manufacturers started to charge premium for those -> manufacturers made insane profit from those (under 1% profit on a car, up to 50% profit on large SUV) -> manufacturer using ridiculously inefficient vehicles in all their product placement and increase product placements -> people started to buy those exclusively to the point that one manufacturer completely stopped selling car)
- Industries typically pollute a lot than individual, and get away with ridiculously low fines when they do get caught.
More to the point, the ones that are fighting tooth and claw to maintain the fossil fuel status quo, including blocking consideration of a carbon tax, which would be the market-based remedy to the externality in the GP comment. But also those fighting legitimate scientific inquiry into climate change, emission regulation, better fuel efficiency standards, etc.
> The straightforward - but not easy - solution is to ask governments to assess a charge on each sold item that brings the price in line with the full cost to society.
Sadly, the first blip in GDP growth and this is out the window.
Dirty little secret: this is deliberate. Why do you think the West closed all its heavily regulated factories and shifted manufacturing to China where environmental protection and workers rights don’t exist?
We should impose tariffs to punish imports from anywhere that isn’t up to Western standards of regulation. That’s the only way for the market to fix this.
So we destroy the planet so the CCP can cling to power for a few more years? Because that’s what that is.
And no one in the West will really suffer if their consumer tat costs more. Maybe we don’t need a new phone every year or maybe we could buy locally made clothes that last a few years?
The hard part has obviously been justifying government intervention when there's still uncertainty. Or at least, when those with vested short-term interests can make a strong case about uncertainty. I thought at one point that the insurance industry was going to make a difference, but haven't seen much about that lately.
Even when people talk about electric cars (deliberately ignoring the potential end-to-end cost here) they will talk about how they sometimes drive cross country to their parents house, or that they tow their travel trailer huge distances that they couldn't possibly do with an electric vehicle.
Then you consider that to make a meaningful change in carbon emissions they probably would need to move to an aerodynamic recumbent electric bicycle for most of their day to day trips you can see how far away we are from making progress.
But hey, look at the bright side. Parts of northern Europe aren't far from that ideal. And most of suburban North America will be abandoned, and with any luck we'll get sanely designed cities in habitable areas.
Are future generations going to pay same price we would today? Or are they going to get a discount due to more advanced technology?
But I would not say this is market failure, to me this is market working exactly as intended and expected: maximizing profit without caring for the rest.
On the other hand, it is not a question of subsidy/handout paid by future generation anymore, we're now at the point where it is a matter of going over the threshold effect where the consequence will be no human life possible on earth in a matter of decades.
That is very unlikely. People could have survived just fine during the Eocene Optimum, ~50 Myr ago. When the entire planet was tropical. Assuming that they knew what to eat, anyway.
Widespread ecosystem collapse is a plausible risk.
The thing that matters is keeping our current technological civilization together. If it collapses, it'll undo all the things humanity has achieved, and will prevent the next couple hundred generations from achieving them again. All the advancements in our understanding of the universe, our capabilities, our quality of life - and all the hopes of further advances, ending aging, leaving Earth - poof, gone, not coming back in a while.
(Yes, I'm of a view that there's little difference between humanity 500 years ago and 5000 years ago; everything that's interesting started happening with the printing press and industrial revolution.)
The worst-case scenario is a collapse of civilization, which - with or without wars - means mass starvation (if you live in a large city, you'll die in the first week). Your grandchildren - or more likely, someone else's grandchildren - will be living in Mad Max hellscape, desperately trying to stave off reverting to pre-industrial levels of life and technology.
(And with all the easily accessible energy sources already mined out and gone, I suspect the next industrial revolution won't be possible for many, many millennia.)
This is why we regulate the market. The market will seek to maximize its profit within the bounds of the law. Make the above suggestion compulsory, and the market will adjust to it.
Pop bottles carried a .05 charge on each bottle, refunded when the empty bottle was returned to the store. Careless consumers (litterers) might just throw the bottles out. Likewise lazy consumers might decide it's 'beneath them' to bring back the empties. But for hungry young scavengers like myself (had to pay for 'Space Invaders' somehow) it was a great source of income.
I'd be glad to see the same idea scaled up.
Ultimately the greatest "burden" on environmental pressure is people having more children. Perhaps children should be taxed specific to their effectual "impact".
The government would have to assess a tax or fee that covers those externalities, and then Apple would be forced to deal with it. Either pass the tax to consumers to save the profit margin, or control externalities to remove the tax at the cost of profit margin.
Presently, Apple products, like all electronic products (and indeed, most products of any kind), are priced without regard to external costs. That the profit margins may high enough to pay for these external costs is only a coincidence due to Apple's silly-high prices.
So we'd keep the "decentralized resource allocation" part of capitalism, but with hopefully better sustainability...
Another example is continuous inflation of fiat currency (exponential growth), whereas all things that experience exponential growth in nature eventually run into a limit or another correcting factor.