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The Pigou Club : Planet Money A hundred years ago, economist Arthur Cecil Pigou explained how to tax things like pollution. Countries are starting to do it. Subscribe to our weekly newsletter here.

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The Pigou Club

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Photograph courtesy of the Cambridgeshire Collection, Cambridge Central Library. Cambridge Central Library hide caption

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Cambridge Central Library

Photograph courtesy of the Cambridgeshire Collection, Cambridge Central Library.

Cambridge Central Library

In the nineteenth and early twentieth centuries, a smog settled over London. It was called the London Fog, or Pea Soup. It was the result of factories and homes burning coal. But much of the cost was borne by third parties who earned nothing from the burned coal. Economist Arthur Cecil Pigou was among the first to explain the concept of such a "negative externality," and the first to suggest a way to deal with it.

Now, Pigou's insight is being used to fight climate change.

Music: "Stinkbug Stardust And The Tremors That We Know Of," "Sizzle Chest," "Don't Look Down," and "Werner's Tangent."

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