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Answer to Question #331426 in Economics for Vtg
Question #331426
Global warming is becoming a serious problem for mankind. According to the Coase Theorem government should leave this matter to the market to solve. Do you agree? Argue your case with the aid of economic theory.
Expert's answer
Global warming is a negative economic externality. Currently, there is no market for this issue. It is only to be created in the form of tradeable carbon quotas. Only after this market forces will be able to start solving the issue of global warming.
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