The economics of the greenhouse effect

Research output: Contribution to journalArticle

6 Citations (Scopus)

Abstract

The recognition that economic activity is contributing to climatic change, with attendant costs that may be of large magnitudes, has set in motion a substantial research effort. This paper seeks to review the contribution of economics to analysis of the greenhouse effect and to the policies and instruments suggested as means of mitigating its damage. A brief overview of the causes and consequences of global warming is given, and a number of energy-economy forecasting models are examined. As the costs of global warming depend upon the extent to which preventative and adaptive measures are undertaken, the techniques available to evaluate these costs are surveyed. We examine extant targets for greenhouse gas emissions reduction, and explore the frameworks within which optimal policy targets can be designed. The paper also considers the narrower question of (minimized) abatement costs, and surveys the types of models used to estimate them. The merits of alternative policy instruments are examined, paying particular attention to the role that risk and uncertainty, and the costs of monitoring and implementation of policy under conditions of imperfect information, may play in the choice of instruments. Problems of international co-operation in the development of abatement policy are examined, and we consider the compensations (across both nations and generations) that are likely to be necessary conditions for effective action.
LanguageEnglish
Pages99–132
Number of pages34
JournalJournal of Economic Surveys
Volume8
Issue number2
DOIs
Publication statusPublished - Jun 1994

Fingerprint

Economics
Greenhouse effect
Costs
Global warming
Greenhouse gas emissions
Emission reduction
Optimal policy
Damage
Risk and uncertainty
Abatement costs
Imperfect information
Policy instruments
Abatement
Economic activity
Energy
International cooperation
Climatic change
Monitoring

Keywords

  • climate change
  • greenhouse effect
  • economics of pollution
  • carbon taxes
  • optimal policy

Cite this

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The economics of the greenhouse effect. / Perman, Roger.

In: Journal of Economic Surveys, Vol. 8, No. 2, 06.1994, p. 99–132.

Research output: Contribution to journalArticle

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