Freakonomics author Steven D. Levitt suggests science and market forces will eliminate the climate-change problem with minimal effort.
Michael T. Burr is editor-in-chief of Public Utilities Fortnightly. E-mail him at firstname.lastname@example.org.
Prostitution, sumo wrestling and horse manure have one thing in common. Economist Steven D. Levitt has studied them all. Co-author of the hugely successful Freakonomics, Levitt applies orthodox principles of economic theory—i.e., supply-demand dynamics and scarcity pricing—to unorthodox economic questions.
No stranger to controversy, Levitt sparked a firestorm of criticism in 2001 when he demonstrated a correlation between legalized abortion and a reduction in crime rates. Later he analyzed the economics of crack dealing to show how street dealers face enormous physical risks for the equivalent of minimum wage. And his studies of the Ku Klux Klan suggested the infamous organization in the 1920s was comprised mostly of educated professionals, and the group’s actions had little effect on lynching patterns or election results.
Levitt downplays the applicability of his work to the business world. “I have a litany of unsuccessful attempts to get companies to change,” Levitt told a group of utility executives and Wall Street finance professionals at the EEI Financial Conference in November 2007. At the same time, however, he encouraged the industry’s decision-makers to keep an open mind about solutions to the problems they face.