The Economics of the Anthropocene

Externalities are a key economic concept for understanding the challenges of the Anthropocene. Yet the traditional way of thinking about externalities has important limitations. In this talk, I will present a different perspective: instead of viewing externalities simply as harm caused by one person to another, I will focus on conflicts between different ways in which people want to use scarce resources. The key question then becomes how these conflicts can be resolved and what rules can help us resolve them at the lowest possible cost. Using concrete examples, I will show how different rules affect the way such conflicts are resolved and what this perspective can teach us about the Anthropocene.