The "Stern Review" on the Economics of Climate Change

23 Pages Posted: 7 Dec 2006 Last revised: 4 May 2007

See all articles by William D. Nordhaus

William D. Nordhaus

Yale University - Department of Economics; Cowles Foundation, Yale University; National Bureau of Economic Research (NBER)

Date Written: December 2006

Abstract

How much and how fast should the globe reduce greenhouse-gas emissions? How should nations balance the costs of the reductions against the damages and dangers of climate change? This question has been addressed by the recent "Stern Review on the Economics of Climate Change," which answers these questions clearly and unambiguously. We need urgent, sharp, and immediate reductions in greenhouse-gas emissions. An analysis of the "Stern Review" finds that these recommendations depend decisively on the assumption of a near-zero social discount rate. The Review's unambiguous conclusions about the need for extreme immediate action will not survive the substitution of discounting assumptions that are consistent with today's market place.

Suggested Citation

Nordhaus, William D., The "Stern Review" on the Economics of Climate Change (December 2006). NBER Working Paper No. w12741. Available at SSRN: https://ssrn.com/abstract=948654

William D. Nordhaus (Contact Author)

Yale University - Department of Economics ( email )

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Cowles Foundation, Yale University ( email )

Box 208281
New Haven, CT 06520-8281
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National Bureau of Economic Research (NBER)

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