The economics of climate change: a post-stern perspective

Abstract

What have we learned from the outpouring of literature as a result of the Stern Review of the Economics of Climate Change? A lot. We have explored the model space and the parameter space much more thoroughly. The Stern Review has catalyzed a fundamental rethinking of the economic case for action on climate change. We are in a position to give some conditions that are sufficient to provide a case for strong action on climate change, but we need more work before we have a fully satisfactory account of the relevant economics. In particular, we need to understand better how climate change affects natural capital—the natural environment and the ecosystems comprising it—and how this in turn affects human welfare.