IN HIS 2006 report, Sir Nicholas Stern described climate change as “the greatest market failure the world has ever seen”. Dead right. However, it may well be the greatest, but it is only one of countless market failures where the full cost of environmental impacts is not reflected in the price that people pay for the things they buy.
And that has to be the starting point for understanding the role of governments in requiring business to create wealth more sustainably. However elegant their advocacy of cost internalisation may be (to ensure that markets can work transparently and efficiently ...
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