MOTOR TRANSPORT, GREENHOUSE GASES AND ECONOMIC INSTRUMENTS

Motorized transport is the generator of several forms of negative exte rnality including the uncompensated emissions of greenhouse (global wa rming) gases. This paper looks at some of the underlying economic issu es pertaining to policy-making designed to limit the extent of these e xternalities. It sets out the basic nature of the problem and outlines our knowledge of the link between the physical sciences involved and the relevant economic theory. It focuses, in particular, on the strict question of quasi-internalization in the context of a global external ity.