The world is at the beginning of a transition in energy use. The challenge we face in terms of energy and climate change is unprecedented, as the global population heads towards 9.5 billion by 2060 and hundreds of millions of people move out of poverty in the emerging economies. Demand for energy could rise by up to 80% by around 2050, increasing global greenhouse gas emissions. All sources of energy will be needed, i.e. oil, gas, coal, bio, wind, solar, nuclear etc. But choices will need to be made. Professor Robert Stavins believes that an approach that allows market forces to influence the energy choices that are made is needed. Robert N. Stavins is the Albert Pratt Professor of Business and Government, Director of the Harvard Environmental Economics Program, and Chairman of the Environment and Natural Resource Faculty Group at the John F. Kennedy School of Government, Harvard University. Professor Stavins’ research has focused on diverse areas of environmental economics and policy, including examinations of: market-based policy instruments; regulatory impact analysis; innovation and diffusion of pollution-control technologies; environmental benefit valuation; policy instrument choice under uncertainty; competitiveness effects of regulation; depletion of forested wetlands; political economy of policy instrument choice; and costs of carbon sequestration. In this video, Professor Stavins asserts that carbon pricing is an important tool for governments to use in meeting mitigation goals in a cost effective manner. Putting a price on CO2 emissions should mean that the fastest and lowest-cost CO2 emission reduction measures are implemented first and that all measures are used. This approach would provide certainty and confidence for private sector investors to deliver the energy the world needs and the CO2 mitigation actions required.