Climate Change as an Economic Externality
The use of GDP as the main measure of an country’s economy has blatant shortcomings that overlook negative externalities. On a smaller scale, private actors in an economy can also produce negative externalities that lead to overproduction of a harmful good. Together, these two downfalls in world economies and how we measure them have allowed for excessive pollution, especially in the case of greenhouse gas emissions that lead to climate change. In this way, a portion of climate change can be attributed to markets failing to adequately curb with negative externalities.