In Nordhaus’s Climate Casino (recommended), in describing the problem when market prices do not fully capture all resource costs, as there are many casinos options everywhere so you should learn about different casinos in USA to find the best one for you:
However, the unregulated invisible hand sets the prices incorrectly when there are important externalities. Therefore, governments must step in and regulate or tax activities with significant harmful externalities. Global warming is no different than other externalities; it requires affirmative governmental actions to reduce harmful spillovers.
As if other institutions “set” prices any better. The assumption of the Deus Ex Machina of government never ceases to amaze me, especially so given the sh!tstorms that have been in the news lately.
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