Norway sets an example

Mostly what happened at the recent U.N. Climate Summit was speech-making.  In fact, all that hot air may have made the situation worse.  Except for Norway.  Norway announced that it had reached agreement with Liberia to provide that country with $150 million in aid; in return Liberia will work to stop the destruction of its jungles.

The financial page of the New Yorker explained this as the “Coase Theorem.”  In 1960 an economist named Ronald Coase said that bargaining between parties could produce a solution to problems like pollution that was of mutual benefit.

This is called “payment for ecosystem services.”  Norway benefits by reducing global warming; Liberia receives much needed aid.  Norway did something similar with Brazil some years ago.

I don’t see why the Coase Theorem applies only to ecosystem services.  For example, if the U.S. gave aid to Liberia to combat Ebola, Liberia would benefit, but so would the U.S. in an age when air travel can spread disease rapidly across the globe.