Addressing the Urgency of More Stringent Climate Change Policy

Characteristics of the climate system and recent scientific findings imply that stronger action to reduce carbon dioxide (CO2) emissions is urgent.The urgency of stronger action makes consideration of political feasibility especially important in policy assessments.Economists can closely consider political feasibility in their assessments without departing from their roles as economists.Attention to political feasibility can affect the cost-rankings of policy alternatives.A broader notion of cost-effectiveness recognizes the potential savings from policies that have greater prospects for near-term implementation and for avoiding the costs of delay.Under this broader notion of cost-effectiveness, policy “add-ons” (such as compensation to particular stakeholder groups) that increase the likelihood of near-term implementation can pay for themselves by helping avoid costs of delay; under the broader notion, “add-ons” sometimes lower, rather than raise, expected policy costs.