We just have to cry for climate policies? - A risk exists that the global warming debate is driven by an excessively emotional approach, which asserts the need to find a solution is more urgent than how it perhaps might be. Under this context, it is more likely that policy tools are picked, which are relatively less efficient, or that in the implementation process they are manipulated in favor of vested interests. An analysis of the available evidence suggests what follows: (a) priority should be placed upon the task of developing sound policies, rather than the need to take immediate steps towards unilateral reduction of carbon emissions; (b) emissions will grow more rapidly in the developing world; (c) in these countries, the marginal cost of abatement tends to be lower; (d) the creation of an investmentfriendly economic climate, for example through the promotion of economic freedom, may positively affect, in the long run, the reduction of carbon emissions, while having a positive impact on economic growth; (e) in the developed world, a price instrument (carbon tax) is likely to be more efficient and less distorsive than a quantity instrument (cap and trade) in order to control emissions.
Keywords: Climate change; carbon tax; cap and trade; economic freedom.
Jel Code: Q54, Q58, H23