Episode 949: The Pigou Club | Planet Money
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.