Some people argue that the primary cause of global warming is carbon dioxide, which enters the atmosphere in varying amounts from different countries but is distributed equally around the globe within a year. In order to solve this problem, some economists have argued that carbon dioxide emissions should be reduced in countries where the costs are least, with the countries that bear that burden being compensated by the rest of the world.

a. Why is international cooperation necessary to reach an efficient outcome?

b. Is it possible to devise a compensation scheme such that all countries would be better off than under a system of uniform emission reductions? Explain.

c. Explain how the concepts of rent seeking and cronyism might be used by critics of climate change theory to argue for different approaches to public policy.