On Setting Near-term Climate Policy while the Dust Begins to Settle: The Legacy of the Stern Review
Gary Yohe (),
Richard Tol () and
No FNU-129, Working Papers from Research unit Sustainability and Global Change, Hamburg University
We review the explosion of commentary that has followed the release of the Stern Review: The Economics of Climate Change, and agree with most of what has been written. The Review is right when it argues on economic grounds for immediate intervention to reduce emissions of greenhouse gases, but we feel that it is right for the wrong reasons. A persuasive case can be made that climate risks are real and increasingly threatening. If follows that some sort of policy will be required, and the least cost approach necessarily involves starting now. Since policy implemented in 2007 will not “solve” the climate problem, near term interventions can be designed to begin the process by working to avoid locking in high carbon investments and providing adequate incentives for carbon sequestration. We argue that both objectives can be achieved without undue economic harm in the near term by pricing carbon at something on the order of $15 per ton as long as it is understood that the price will increase persistently and predictably at something like the rate of interest; and we express support for a tax alternative to the usual cap-and-trade approach.
Keywords: Stern Review, climate change, climate policy, social discount rate; risk and equity aversion (search for similar items in EconPapers)
JEL-codes: Q54 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2007-03, Revised 2007-03
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed
Published, Energy & Environment, 18 (5), 621-633
Downloads: (external link)
http://www.fnu.zmaw.de/fileadmin/fnu-files/publica ... ergyenvironment2.pdf First version, 2007 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to www.fnu.zmaw.de:80 (No such host is known. )
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:sgc:wpaper:129
Access Statistics for this paper
More papers in Working Papers from Research unit Sustainability and Global Change, Hamburg University Contact information at EDIRC.
Bibliographic data for series maintained by Uwe Schneider ( this e-mail address is bad, please contact ).