As the climate policy debate intensifies, economic analysis is playing an increasingly central role. The case for inaction is no longer argued on the grounds of skepticism about the science; instead, some have claimed that it will be too expensive to take more than token initiatives. There is now extensive economic analysis that challenges and refutes this idea. The peer-reviewed literature demonstrates that there is rigorous economic support for immediate, large-scale policy responses to the climate crisis.
The articles included here generally reflect and build on the following principles:
- Risk and uncertainty are fundamental to the climate problem; the magnitude and the irreversibility of uncertain, but possible, worst-case climate impacts dominate the analysis of policy options.
- Ethics and equity are inseparable from economic analysis; there are deep questions of fairness between rich and poor today, and between present and future generations, at stake in the debate.
- The severity of the problem and the scope of the required response are so great that marginal analysis of small changes and modest adjustments of market-based instruments are inadequate to the task of understanding and protecting the earth’s climate….