So much hot air has been spouted over climate change it is a wonder the ice caps haven’t melted already. At first the debate was whether climate change was happening, and if so whether it was humanity’s fault. Far too late for the tastes of most economists, the debate then started to encompass other important questions, such as whether the costs of responding to the threat outweighed the benefits.

Perhaps I should withdraw my jibe about hot air. This is such an uncertain business, and the stakes are so high, it is no surprise that the debate on both questions continues. Still, that should not distract us from asking a different kind of question: given that climate change is going to need a policy response, what kind of institutions are best suited to implement it?