Page "Carbon tax" Paragraph 8

Within Pigou's framework, the changes involved are marginal, and the size of the externality is assumed to be small enough not to distort the rest of the economy.

According to the scientific consensus, the impact of climate change may result in catastrophe and non-marginal changes.

" Non-marginal " means that the impact could significantly reduce the growth rate in income and welfare.

The amount of resources that should be devoted to avoiding climate change impacts is controversial.

Policies designed to reduce carbon emissions could also have a non-marginal impact.