The Economist's latest issue, dedicated to "Cleaning up" the environment, is free to nonsubscribers online and full of interesting content. "The final cut," a piece that explores business and government roles in preventing climate change, makes some important points about who the agents of change will be in solving the climate change problem at different steps.

Consumers can make "green" fashionable, pushing companies to market and direct their products to meet that preference; but fashion is fleeting, and it's not clear that these preferences will fundamentally affect the "demand curve" as economists would say.

But consumers can play a role wearing a different hat:

As voters... people can make a difference. Climate change is a collective problem, which can be dealt with only collectively. Voters can encourage that by electing governments committed to changing the rules to encourage companies to behave differently.

Policy incentives will move businesses to continue innovating and solving the climate change problem over a long period of time. The piece discusses a menu of options that voters could push for via their leaders: subsidies, industry standards, cap-and-trade systems and/or a carbon tax (pricing carbon).

The Economist comes down squarely in favor of a carbon tax (a healthy sign for a publication considered a friend of industry), much as a thoroughly-reasoned editorial in the LA Times did last week. But as Tarek noted (and The Economist notes as well), a "carbon tax" has dim prospects. We badly need another frame for the idea of pricing carbon.

Assuming we get there and setting a carbon price becomes politically possible, developed countries can set a meaningful example, argues The Economist:

...All rich countries [must] take the first step. They need to set an effective carbon price, and show the developing world that they can do so without ruining their economies. It wouldn't be a solution to climate change, but it would be a start.