Climate Policy: Stop Wanting to Pay to Evade Our Responsibilities

We explore an alternative to existing economic instruments to tackle climate change: carbon liabilities. Such liabilities would hold countries responsible for future climate damage to the tune of their emissions over time. The prospect of having to repay this carbon debt over time is enough to discipline emitters, leading to the efficient emissions level. Contrary to existing instruments, our scheme does not rest on a consensus regarding the discount factor nor about climate forecasts; this, together with its reliance on observed damage, allows for better international participation and leads to a fairer division of costs and risks