Figuring the costs of climate change: an assessment and critique
In this paper we examine the evidence for the IPCC (IntergovernmentalPanel on Climate Change) estimate that the costs of global climate changewill be on the order of 1.5 - 2.0% of world gross domestic product (GDP). Although this estimate is widely andauthoritatively repeated, it rests on a handful of preliminary studies, chiefly of the United States and performed by a select group ofeconomists. We examine the methods and assumptions of these studies andconsider the social and political commitments built into their analyticaltechniques. We conclude that the prevailing methods of economic damageassessment and valuation provide a highly conservative estimate of thepotential costs and risks of future climate change. We suggest that theIPCC scientific assessment process has been organized in such a way asto foreclose public debate about the moral and political judgments builtinto the technical details of its reports.