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Economics of Global Warming

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  • Gillespie, Robert

Abstract

This paper conveniently skips any controversy associated with the science of climate change. On the assumption that greenhouse gas emissions are causing climate change that is detrimental to humanity, the paper focuses on some economic dimensions of the issue which seem to be poorly understood by Australian media commentators, policy analysts, interest groups and the political parties. Using a neoclassical welfare economics framework the paper explores the costs and benefits of greenhouse gas abatement with reference to the findings of the Stern Report, the setting of greenhouse gas targets by Australian political parties, the danger of the government “picking winners” and the emerging carbon theory of value. The paper concludes with a brief review of the relative merits of a carbon tax and a cap and trade approach. Key Words: This paper conveniently skips any controversy associated with the science of climate change. On the assumption that greenhouse gas emissions are causing climate change that is detrimental to humanity, the paper focuses on some economic dimensions of the issue which seem to be poorly understood by Australian media commentators, policy analysts, interest groups and the political parties. Using a neoclassical welfare economics framework the paper explores the costs and benefits of greenhouse gas abatement with reference to the findings of the Stern Report, the setting of greenhouse gas targets by Australian political parties, the danger of the government “picking winners” and the emerging carbon theory of value. The paper concludes with a brief review of the relative merits of a carbon tax and a cap and trade approach.

Suggested Citation

  • Gillespie, Robert, 2008. "Economics of Global Warming," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 6006, Australian Agricultural and Resource Economics Society.
    • Handle: RePEc:ags:aare08:6006
    DOI: 10.22004/ag.econ.6006
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    References listed on IDEAS

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    1. William D. Nordhaus, 2007. "A Review of the Stern Review on the Economics of Climate Change," Journal of Economic Literature, American Economic Association, vol. 45(3), pages 686-702, September.
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    Keywords

    Environmental Economics and Policy; Political Economy; Public Economics;
    All these keywords.

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