Climate Change Policy

Resources for the Future Working Paper No. 00-22

44 Pages Posted: 16 Oct 2000

See all articles by Jason F. Shogren

Jason F. Shogren

University of Wyoming

Michael Toman

World Bank - Development Research Group (DECRG)

Date Written: May 2000


Having risen from relative obscurity as few as ten years ago, climate change now looms large among environmental policy issues. Its scope is global; the potential environmental and economic impacts are ubiquitous; the potential restrictions on human choices touch the most basic goals of people in all nations; and the sheer scope of the potential response ? a significant shift away from using fossil fuels as the primary energy source in the modern economy ? is daunting. In this paper, we explore the economics of climate change policy. We examine the risks that climate change poses for society, the benefits of protection against the effects of climate change, and the costs of alternative protection policies. We organize our discussion around three broad themes: why costs and benefits matter in assessing climate change policies, as does the uncertainty surrounding them; why well-designed, cost-effective climate policies are essential in addressing the threat of climate change; and why a coherent architecture of international agreements is key to successful policy implementation. We conclude the paper with a summary of key policy lessons and gaps in knowledge.

JEL Classification: Q25, Q28, Q48

Suggested Citation

Shogren, Jason F. and Toman, Michael, Climate Change Policy (May 2000). Resources for the Future Working Paper No. 00-22, Available at SSRN: or

Jason F. Shogren

University of Wyoming ( email )

Department of Economics
Laramie, WY 82071-3985
United States
307-766-5430 (Phone)
307-766-5090 (Fax)

Michael Toman (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street N.W.
Washington, DC 20433
United States

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