Florida State University College of Law Scholarship Repository Scholarly Publications 2011 A Prediction Market for Climate Outcomes Shi-Ling Hsu Florida State University College of Law Follow this and additional works at: https://ir.law.fsu.edu/articles Part of the Environmental Law Commons, Law and Politics Commons, Natural Resources Law Commons, and the Oil, Gas, and Mineral Law Commons Recommended Citation Shi-Ling Hsu, A Prediction Market for Climate Outcomes, 83 U. COLO. L. REV. 179 (2011), Available at: https://ir.law.fsu.edu/articles/497 This Article is brought to you for free and open access by Scholarship Repository. It has been accepted for inclusion in Scholarly Publications by an authorized administrator of Scholarship Repository. For more information, please contact
[email protected]. A PREDICTION MARKET FOR CLIMATE OUTCOMES * SHI-LING HSU This Article proposes a way of introducing some organization and tractability in climate science, generating more widely credible evaluations of climate science, and imposing some discipline on the processing and interpretation of climate information. I propose a two-part policy instrument consisting of (1) a carbon tax that is indexed to a “basket” of climate outcomes, and (2) a cap-and- trade system of emissions permits that can be redeemed in the future in lieu of paying the carbon tax. The amount of the carbon tax in this proposal (per ton of CO2) would be set each year on the basis of some objective, non-manipulable climate indices, such as temperature and mean sea level, and also on the number of certain climate events, such as flood events or droughts, that occurred in the previous year (or some moving average of previous years).