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Costs of adjustment to climate change

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  • John Quiggin
  • John Horowitz

Abstract

The present paper argues that the costs of climate change are primarily adjustment costs. The central result is that climate change will reduce welfare whenever it occurs more rapidly than the rate at which capital stocks (interpreted broadly to include natural resource stocks) would naturally adjust through market processes. The costs of climate change can be large even when lands are close to their climatic optimum, or evenly distributed both above and below that optimum.

Suggested Citation

  • John Quiggin & John Horowitz, 2003. "Costs of adjustment to climate change," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(4), pages 429-446, December.
    • Handle: RePEc:bla:ajarec:v:47:y:2003:i:4:p:429-446
    DOI: 10.1111/j.1467-8489.2003.00222.x
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