Responding to the threat of climate change.

This essay on the threat of climate changes sparked by greenhouse gas emissions opens by noting that global warming could have catastrophic economic effects unless governments support innovative policies that foster rapid adoption of newly available technologies that can rapidly improve the efficiency of energy use. The essay continues by reviewing the reasons for the growth in emissions in some industrialized and developing countries and by proposing that the cost of new policies to induce technological change is overestimated and that policy-makers must seek ways to simultaneously stabilize the climate and strengthen economies. The next section discusses government subsidies of fossil fuel use and the possibility of adjusting use taxes to reflect the effect of fossil fuels on carbon emissions. The essay continues with a look at ways government policies can boost energy efficiency and at policies that promote use of renewable energy supplies. It is concluded that the international climate protocol adopted in Kyoto in 1997 may prove to be an important turning point in the long-term effort to protect the earth from this environmental threat but that this agreement provides only a broad framework for action. The required government policy will actually be a portfolio of policies that include fiscal regulatory voluntary and market-based approaches. Some countries are making progress towards achieving this goal. While governments sometimes are slow to implement new policies once they do so they can often make rapid progress.