Economic Analysis of Global Climate Change Policy: A Primer

21 Pages Posted: 9 Oct 2000  

Robert N. Stavins

Harvard University - Harvard Kennedy School (HKS); Resources for the Future; National Bureau of Economic Research (NBER)

Date Written: August 29, 2000

Abstract

Global climate change ? perhaps even more than other environmental problems ? can be addressed successfully only with a solid understanding of its economic dimensions. This paper, prepared as an introduction to the economics section of a forthcoming book from the Pew Center on Global Climate Change, provides a primer for non-economists on how economic analysis can be brought to bear on three broad questions: what will be the benefits of global climate policies; what will be their costs; and how can this information about alternative policies be assimilated in ways that are ultimately most useful for decision makers? Because of the magnitude of the anticipated benefits and costs of addressing the threat of global climate change, its great time horizons, massive uncertainties, and physical and economic irreversibilities, public policy in this area presents significant challenges to economic research. Nevertheless, a firm foundation is provided by the existing literature from nearly three decades of theoretical and empirical economic analysis.

Keywords: global climate change, benefit-cost analysis, cost effectiveness, distributional equity, interngenerational equity

JEL Classification: Q25, Q48

Suggested Citation

Stavins, Robert N., Economic Analysis of Global Climate Change Policy: A Primer (August 29, 2000). KSG Working Paper No. 00-003. Available at SSRN: https://ssrn.com/abstract=240389 or http://dx.doi.org/10.2139/ssrn.240389

Robert N. Stavins (Contact Author)

Harvard University - Harvard Kennedy School (HKS) ( email )

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Resources for the Future

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National Bureau of Economic Research (NBER) ( email )

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