The cost of delaying climate action has been studied extensively. This column discusses new findings based on a meta-analysis of published model runs. A one-decade delay in addressing climate change would lead to about a 40% increase in the net present value cost of addressing climate change. If anything, the methodology used in this analysis could understate the cost of delay. Uncertainty and the possibility of tipping points provide a motivation for more action as a form of insurance against worse outcomes.
Jason Furman, Ron Shadbegian, Jim Stock, Wednesday, February 25, 2015
Jean-Marie Grether, Nicole A. Mathys, Caspar Sauter, Saturday, January 31, 2015
Spatial inequalities in territorial-based greenhouse emissions matter in terms of regulation, both at the international and subnational levels. This column decomposes these inequalities worldwide for the two major greenhouse gases over the period 1970–2008. Within-country inequalities are larger, and rising, while between-country inequalities are smaller and falling. Moreover, social tensions arising from the discrepancy between the distribution of emissions and the distribution of damages appear to be larger within than between countries, and larger for carbon dioxide than for methane.
Valentina Bosetti, Jeffrey Frankel, Monday, November 24, 2014
Many countries have announced emissions targets for 2020. To evaluate which countries are doing their fair share, this column proposes a ‘scorecard’ approach based on three principles of fairness in climate change mitigation: latecomer catch-up, progressivity, and cost. The authors find that most countries’ targets, including those of China and the US, are in line with what such a scorecard would suggest.
Rick van der Ploeg, Aart de Zeeuw, Thursday, July 31, 2014
Many ecological systems feature ‘tipping points’ at which small changes can have sudden, dramatic, and irreversible effects, and scientists worry that greenhouse gas emissions could trigger climate catastrophes. This column argues that this renders the marginal cost-benefit analysis usually employed in integrated assessment models inadequate. When potential tipping points are taken into account, the social cost of carbon more than triples – largely because carbon emissions increase the risk of catastrophe.
Jeffrey Frankel, Thursday, February 27, 2014
Market-based mechanisms such as cap-and-trade can tackle externality problems more efficiently than command-and-control regulations. However, politicians in the US and Europe have retreated from cap-and-trade in recent years. This column draws a parallel between Republicans’ abandonment of market-based environmental regulation and their recent disavowal of mandatory health insurance. The author argues that in practice, the alternative to market-based regulation is not an absence of regulation, but rather the return of inefficient mandates and subsidies.
Richard S J Tol, Tuesday, November 27, 2012
The 18th UN Conference on climate change negotiations has just started in Doha. This column suggests that the probability of success is a mere 2.3%. Recently, over $100 million per year was spent on fruitless negotiations. Having flogged, ever harder for 18 years, the dead horse of legally binding emission targets, the UN should close that chapter and try something new.
John Hassler, Sunday, March 11, 2012
The concern over the negative consequences of global warming has led to a vast array of policy measures aimed at reducing the use of fossil fuels. Yet a comprehensive plan for a shift towards more climate-friendly energy is still lacking. This column argues that a major reason for this is that macroeconomists have not been sufficiently active in the policy discussion. It then lays out four lessons from macroeconomics that should be helpful.
Matthew E. Kahn, Friday, September 30, 2011
Matthew Kahn of the University of California, Los Angeles, talks to Romesh Vaitilingam about global warming – and the incentives for individuals, cities and nations to reduce their greenhouse gas emissions or to adapt their lives to a warmer planet. He explains how free market capitalism might drive effective climate change mitigation or adaptation. The interview was recorded at Growth Week in London in September 2011. [Also read the transcript]
Matthew E. Kahn, Matthew J. Kotchen, Saturday, August 21, 2010
Is concern for the environment a luxury good? This column presents data from Google searches for the words “unemployment” and “global warming” by US users. It argues that recessions increase concerns about unemployment at the expense of people’s interest in climate change – in some cases leading them to deny its existence.
Richard S J Tol, Dritan Osmani, Wednesday, June 23, 2010
In 1994, Scott Barrett predicted that international environmental agreements had either many signatories who promise to do very little, or a few signatories who promise to do a lot. This column tests this suggestion by considering the role of other coalitions. One result is that, to solve global problems, the UN forum should hold negotiations with the largest emitters only.
Benjamin Olken , Benjamin Jones, Friday, April 16, 2010
What are the likely economic effects of climate change? This column examines the impact of changes in climate on detailed export data. If a poor country is one degree Celsius warmer in a given year, its exports are lower, by as much as 5.7%. While there is no effect on rich countries’ exports, their consumers will still suffer from reduced imports at higher prices.
Richard S J Tol, Monday, November 23, 2009
Climate change will have widespread negative effects of uncertain magnitude. But this column argues that climate change is not humanity’s biggest challenge and needs to be solved without impeding economic development. It calls for a measured policy of greenhouse gas emission reduction.
Carlo Carraro, Emanuele Massetti, Thursday, September 3, 2009
Mitigating global warning is a pressing and daunting task for the world’s major economies. This column says that the 2°C target set by G8 leaders is both politically and technologically unrealistic. It argues they must adopt more realistic targets and long-term commitments to adaptation plans.
Charles Kolstad, Corbett Grainger, Saturday, August 29, 2009
Opponents of US climate change legislation voice concerns about its effect on consumers in coal-reliant states, industries’ competitiveness, and regressive distributional consequences. This column argues that these concerns are either unfounded or have been addressed fairly. It says the conflict is more about ideology than distributional issues.
Valentina Bosetti, Carlo Carraro, Alessandra Sgobbi, Massimo Tavoni, Saturday, December 6, 2008
Policymakers need to agree to the post-Kyoto climate architecture soon to implement it in 2012. Using a set of quantitative indicators, this column assesses a number of proposed international climate policy architectures and evaluates their economic efficiency, environmental effectiveness, distributional implications, and enforceability. Unfortunately, the most effective policies are the most costly and hardest to enforce.
Valentina Bosetti, Carlo Carraro, Alessandra Sgobbi, Massimo Tavoni, Tuesday, October 14, 2008
The future of climate change policy is very uncertain due to economic, environmental, and political complexities. This column quantifies the economic cost of delaying action to reduce carbon emissions and argues that the best strategy is to hedge our bets by adopting a mild emissions reduction policy now rather than naïvely waiting for the uncertainties to be resolved.
William R. Cline, Friday, July 18, 2008
William Cline of the Peterson Institute for International Economics talks to Romesh Vaitilingam about climate change – in particular, its impact on developing countries; what economists bring to analysis of carbon mitigation technologies and policies; and the importance of an international agreement on global warming. The interview was recorded at the American Economic Association meetings in New Orleans in January 2008.
Karin S. Thorburn, Wednesday, April 16, 2008
US climate change policy relies on corporations voluntarily reducing their greenhouse gas output. But recent research shows that pledging to cut carbon is bad for business, which is why so few firms take such voluntary measures. Reducing carbon emissions will require regulation.
Paul Klemperer, Tuesday, April 1, 2008
Serious scientists worry that feedback effects could - beyond some unknown “tipping point” - cause runaway warming with unforeseeable outcomes that would look like bad science fiction from today’s perspective. The continuing scientific uncertainty should make us more concerned, not less.
Carlo Carraro, Valentina Bosetti, Emanuele Massetti, Massimo Tavoni, Thursday, January 24, 2008
If the world wants to stabilise atmospheric greenhouse gases at 550 parts per million, massive changes are required, especially in the energy sector. This article discusses means and costs of drastically reducing carbon emissions.