Review by Matt Crenson
Dire predictions about global warming make it hard to imagine how the human race will cope with the droughts, heat waves and advancing seas that climate change is expected to bring later this century. But economist Matthew Kahn has a message for prosperous urbanites in developed (and rapidly developing) nations who worry about the fate of their children and grandchildren in a greenhouse world: Don’t.
In cities, where the world’s population is increasingly concentrated, market forces will ensure that all but the poorest have little to fear, Kahn argues. As long as the market is allowed to set fair prices that reflect the environmental costs of energy and the scarcity of finite resources like water, he says, people and cities will adjust. Some cities may even find themselves better off, Kahn contends, as