Why Economic Analysis Supports Strong Action on Climate Change: A Response to the Stern Review's Critics
Review of Environmental Economics and Policy, Vol. 2, No. 1, pp. 94-113, 2008
27 Pages Posted: 27 Aug 2010 Last revised: 11 Jul 2012
Date Written: 2008
Economic research that opposes the strategy of strong and urgent reductions in greenhouse gas emissions often makes the observation, misleadingly, that while scientists, environmentalists, politicians and others would favour strong action, economists would not. Drawing on the Stern Review on the Economics of Climate Change, this paper argues that strong and urgent action is in fact good economics. Much of the previous economic literature on climate change has failed to grasp the necessary scale and timing of action because it has failed to simultaneously assign the necessary importance to issues of risk and ethics. The case for strong and urgent action set out in the Review is based, first, on the severe risks that the science now identifies and, second, on the ethics of the responsibility of current generations for future generations. It is these two issues - risk and ethics - that are crucial.
Keywords: Climate change, discounting, ethics, risk, uncertainty
JEL Classification: A11, H43, Q54
Suggested Citation: Suggested Citation