Mainly because they are absolutely clueless about the physical world (and by observation not too flash when it comes to the financial one either)
Moreover, they mistake carbon dioxide emissions as costs rather than the tremendous good they are for both humanity (boosting crop growth) and wildlife (increasing primary productivity and protecting more wild lands from the plow). Since they start from such a flawed premise they have no hope of ever getting the economics of energy and society anywhere within the ballpark.
When free markets do not maximise society’s welfare, they are said to ‘fail’ and policy intervention may be needed to correct them. Many economists have described climate change as an example of a market failure – though in fact a number of distinct market failures have been identified.
The core one is the so-called ‘greenhouse-gas externality’. Greenhouse gas emissions are a side-effect of economically valuable activities. Most of the impacts of emissions do not fall on those conducting the activities – instead they fall on future generations or people living in developing countries, for example – so those responsible for the emissions do not pay the cost. The adverse effects of greenhouse gases are therefore ‘external’ to the market, which means there is usually only an ethical – rather than an economic – incentive for businesses and consumers to reduce their emissions. As a result, the market fails by over-producing greenhouse gases.
Someone ought to teach these ‘economists’ about double-entry bookkeeping, wherein every plus in one place is a minus in another place, and vice versa.
The distinguishing feature of ‘climate change is that it is a failure in marketING. Nobody with an open mind will buy it any more.
This has nothing to do with economics. ‘Market failure’ is code for ‘spending taxpayers’ or consumers’ money on something they would otherwise not spend it on, using legislative coercion’.
The concept of opportunity cost, which is central to real economics, has been disappeared in the interests of social engineering.
Johanna is correct, Market Failure is not a neutral Economics term. It is one used almost exclusively by the left. On the other hand the idea of Externalities is common across the spectrum. The former is ill defined, deliberately so, the latter precise.
Why would economists get climate science right when they never get their own field right?
Climate change
Recent research by Henrik Svensmark and his group at the Danish National Space Center points to the real cause of the recent warming trend. In a series of experiments on the formation of clouds, these scientists have shown that fluctuations in the Sun’s output cause the observed changes in the Earth’s temperature.
In the past, scientists believed the fluctuations in the Sun’s output were too small to cause the observed amount of temperature change, hence the need to look for other causes like carbon dioxide. However, these new experiments show that fluctuations in the Sun’s output are in fact large enough, so there is no longer a need to resort to carbon dioxide as the cause of the recent warming trend.
The discovery of the real cause of the recent increase in the Earth’s temperature is indeed a convenient truth. It means humans are not to blame for the increase. It also means there is absolutely nothing we can, much less do, to correct the situation.