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The Economics of Climate Change

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  • Lawrence H. Goulder
  • William A. Pizer

Abstract

Global climate change poses a threat to the well-being of humans and other living things through impacts on ecosystem functioning, biodiversity, capital productivity, and human health. This paper briefly surveys recent research on the economics of climate change, including theoretical insights and empirical findings that offer guidance to policy makers. Section 1 frames the climate change problem and indicates the ways that economic research can address it. Section 2 describes approaches to measuring the benefits and costs associated with reducing greenhouse gas emissions. In Section 3 we discuss the implications of uncertainty for the timing and stringency of policies to address possible climate change. We then present issues related to policy design, including instrument choice (Section 4), flexibility (Section 5), and international coordination (Section 6). The final section offers general conclusions.

Suggested Citation

  • Lawrence H. Goulder & William A. Pizer, 2006. "The Economics of Climate Change," NBER Working Papers 11923, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:11923
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    3. Xiao Chen & Alan Woodland, 2013. "International trade and climate change," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(3), pages 381-413, June.
    4. Herbert Wibert & Victor Hasudungana & Sulthon Sjahril Sabaruddinb, 2020. "Incentive-based policy to promote the production of geothermal power from carbon tax scheme: A case of Indonesian CGE model," RIVISTA DI STUDI SULLA SOSTENIBILITA', FrancoAngeli Editore, vol. 0(1), pages 105-127.
    5. Hansjürgens, Bernd, 2008. "Internationale Klimapolitik nach Kyoto: Architekturen und Institutionen," UFZ Discussion Papers 10/2008, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
    6. -, 2011. "An assessment of the economic impact of climate change on the health sector In Trinidad And Tobago," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 38598, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    7. Kocur-Bera, Katarzyna, 2018. "A safe space of rural areas in the context of the occurrence of extreme weather events—A case study covering a part of the Euroregion Baltic," Land Use Policy, Elsevier, vol. 71(C), pages 518-529.
    8. Adel Ben Youssef & Mohamed Arouri & Cuong Viet Nguyen, 2017. "Is Internal Migration A Way to Cope With Climate Change? Evidence From Egypt," Working Papers 1099, Economic Research Forum, revised 05 2017.
    9. Hans Gersbach, 2007. "The Global Refunding System and Climate Change," CER-ETH Economics working paper series 07/62, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    10. Gersbach Hans, 2012. "Contractual Democracy," Review of Law & Economics, De Gruyter, vol. 8(3), pages 823-851, December.
    11. Uzma Hanif & Shabib Haider Syed & Rafique Ahmad & Kauser Abdullah Malik, 2010. "Economic Impact of Climate Change on the Agricultural Sector of Punjab," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 49(4), pages 771-798.
    12. JACKSON Emerson Abraham, 2021. "Financing Sustainable Development: Alleviating Livelihoods In The Forest Sector With Sierra Leone As A Case Study," Management of Sustainable Development, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 13(2), pages 49-65, December.
    13. Omar Chisari, 2010. "Notes on Optimal Growth, Climate Change Calamities, Adaptation and Mitigation," Research Department Publications 4685, Inter-American Development Bank, Research Department.
    14. Aldy, Joseph E. & Pizer, William A. & Akimoto, Keigo, 2015. "A natural outcome of the emerging pledge and review approach to international climate change policy is the interest in comparing mitigation efforts among countries. Domestic publics and stakeholders w," RFF Working Paper Series dp-15-32, Resources for the Future.
    15. Gersbach, Hans & Winkler, Ralph, 2007. "On the Design of Global Refunding and Climate Change," CEPR Discussion Papers 6379, C.E.P.R. Discussion Papers.
    16. Frankel, Jeffrey, 2007. "Formulas for Quantitative Emission Targets," Working Paper Series rwp07-011, Harvard University, John F. Kennedy School of Government.
    17. Pindilli, Emily & Sleeter, Rachel & Hogan, Dianna, 2018. "Estimating the Societal Benefits of Carbon Dioxide Sequestration Through Peatland Restoration," Ecological Economics, Elsevier, vol. 154(C), pages 145-155.

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    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • N50 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - General, International, or Comparative
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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