In This Review

The Spirit of Green: The Economics of Collisions and Contagions in a Crowded World
The Spirit of Green: The Economics of Collisions and Contagions in a Crowded World
By William D. Nordhaus
Princeton University Press, 2021, 368 pp
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Nordhaus builds on a lifetime of work incorporating the concept of externalities into national income accounts and into conceptions of economic growth. He reminds the reader that although private markets are needed to ensure the ample supply of most goods and services, only governments can adequately provide collective goods such as pollution control and public health. He advocates using market mechanisms such as carbon taxes to offset externalities, applying this insight to multiple areas beyond carbon emissions and climate change. Such taxes would not be a drag on the economy; by correcting market failures, they would boost the rate of economic growth. Although Nordhaus emphasizes the indispensability of public policy intervention, coordinated at the international level, in the quest for a greener world, he also sees roles for private ethics and corporate social responsibility.