Broome & Foley - A World Climate Bank

Question 1

Broome Foley Controversy

Answer 1

• Climate change is externality (cost or benefit that affects a party who did not choose to incur that cost or benefit)
• Climate mitigation with no sacrifice possible
• Optimism about well-being of future people
• Borrowing from future people

Question 2

Implications of Broome-Foley

Answer 2

• Not to moralize individuals’ behavior too much
• Future well-being will be better than present well-being
• Trust in market mechanism and capitalism
  Borrow money from future generations but they will be better off

Question 3

Broome Foley argument

Answer 3

Greenhouse-gas emissions cause external costs. They create inefficiency on a huge scale. Eliminating the inefficiency would lead to very great benefits, which could be distributed to the people of the world in a way that improves the life of each of them. No one need make a sacrifice.

Invest in greenhouse gas prevention, finance transformation by the banks and make future generations pay