In a report for the UK government in 2007, the economist Nicholas Stern argued for early action to forestall climate change.

He highlighted the threat of climate disruption as the greatest ‘externality’ facing contemporary society – economic agents, including governments, are not faced with the full costs of their actions, or of failure to act, and some or all of the costs can be off-loaded onto others.

Correcting markets for externalities is a common challenge in economic policy and globalised markets, especially in energy, make policy co-ordination difficult. Items which entail carbon emissions in production or consumption, sometimes both, can move across frontiers without the appropriate charges.

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Countries can ignore their responsibilities or dodge them through failure to account properly in international systems of emissions measurement.

A purely domestic example of an externality is traffic congestion, where the peak-time urban road user imposes delay on others but may not face taxes or charges which reflect the costs of their decisions.

The externality of climate change has not been faced as decisively as Nicholas Stern would have wished – there are 200 sovereign governments around the world and each has incentives to encourage the remaining 199 to incur the cost burdens of cutting carbon emissions.

Every country benefits if the planet’s atmosphere is protected and will applaud the virtuous while dodging the costs.

Most of the world’s emissions are attributable to a small number of large and prosperous countries with high living standards, hence high demand for energy and various products which embody substantial emissions.

Since the alarm was first raised about the threat to the planet, notably by the United Nations’ Intergovernmental Panel on Climate Change in the early 1990s, efforts to slow emissions by international agreement have fallen short and climate scientists are now forecasting that these efforts will not arrest the rise in global temperatures and in the frequency of extreme weather events.

Greenhouse gases persist in the planet’s atmosphere and a troubled future is already fore-ordained.

The central issue is the externality problem identified by economists. If every economic agent faced the full costs of climate damage at the level of the business or household, the economic incentives could be brought into alignment. This may be possible for individual countries, or cities dealing with road congestion, but there is no world government to bring this about for countries, no mechanism to persuade the 200 sovereign states to behave as if they were distinct planets, each orbiting alone with its unique atmosphere and hence with incentives perfectly aligned to encourage the best policies.

If the (single) government of Mars decides not to bother about planetary climate threats, tough luck on them. Back on Earth, each country is dependent on the others to join in the effort to address the climate emergency and many important countries, including recently the US, are declining to sign up.

If there is an exception to this pattern it is the European Union, whose 27 members are now responsible for around 7% of global emissions, half the share 30 years ago. It is not a unitary state, more a confederation of independent countries, but has chosen to pursue common climate policies across a wide range.

They have had some success but are not matched in the US, responsible for twice the EU’s share in global emissions, where for example auto fuel is lightly taxed, currently roughly 80c/l, about half the price in most EU countries.

The US has withdrawn from the Paris Agreement, in effect has no national emissions targets at all and so has chosen for practical purposes to freeload on the efforts of others.

In Ireland, where the farm sector is held to be responsible for 38% of emissions according to the Environmental Protection Agency (EPA), farmers grappling with the costs of on-farm emissions reduction can console themselves in the knowledge that their efforts will help alleviate extreme weather events in the US.

The EPA’s 38% figure reflects a methodology which attributes responsibility for emissions to the country of production, rather than to the country of consumption. If emissions from road fuels were debited to the producing country, petrol and diesel in Ireland would be cheaper and Saudi Arabia would have enormous carbon emissions.

The EPA’s 38% figure reflects the way these things are measured, not the kind of policy which economists like Stern would recommend. He would favour, were he advising a world government, taxes on the consumption of auto fuels everywhere and their production in whatever location happens to have the lowest production costs.

This would indicate dairy production in Ireland where soil and climate are suitable, and oil production in Saudi Arabia. And a more rational economic basis for attributing responsibility for the climate transition between countries and between sectors of the economy.