The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Climate Change, Economics of

  • Lawrence H. Goulder
  • William A. Pizer
Reference work entry


Climate-change economics attends to the various threats posed by global climate change by offering theoretical and empirical insights relevant to the design of policies to reduce, avoid, or adapt to such change. This economic analysis has yielded new estimates of mitigation benefits, improved assessments of policy costs in the presence of various market distortions or imperfections, better tools for making policy choices under uncertainty, and alternative mechanisms for allowing flexibility in policy responses. These contributions have influenced the formulation and implementation of a range of climate-change policies at domestic and international levels.


Carbon emissions tax Climate change, economics of Computable general equilibrium (CGE) models Contingent valuation Discount rate Global warming Hedonic approach Integrated assessment models Intergenerational equity Learning-by-doing Monte Carlo methods Price-based vs. quantity-based policies Production function approach Technology policy Time preference Tradable emission permits Uncertainty 

JEL Classification

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The authors gratefully acknowledge very helpful comments on earlier drafts by Kenneth Arrow, Steven Durlauf, Raymond Kopp, Richard Morgenstern, Robert Stavins and Roberton Williams III.


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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Lawrence H. Goulder
    • 1
  • William A. Pizer
    • 1
  1. 1.