A Question of Balance: Weighing the Options on Global Warming Policiesby William D. Nordhaus
Pub. Date: 06/28/2008
Publisher: Yale University Press
As scientific and observational evidence on global warming piles up every day, questions of economic policy in this central environmental topic have taken center stage. But as author and prominent Yale economist William Nordhaus observes, the issues involved in understanding global warming and slowing its harmful effects are complex and cross disciplinary… See more details below
As scientific and observational evidence on global warming piles up every day, questions of economic policy in this central environmental topic have taken center stage. But as author and prominent Yale economist William Nordhaus observes, the issues involved in understanding global warming and slowing its harmful effects are complex and cross disciplinary boundaries. For example, ecologists see global warming as a threat to ecosystems, utilities as a debit to their balance sheets, and farmers as a hazard to their livelihoods.
In this important work, William Nordhaus integrates the entire spectrum of economic and scientific research to weigh the costs of reducing emissions against the benefits of reducing the long-run damages from global warming. The book offers one of the most extensive analyses of the economic and environmental dynamics of greenhouse-gas emissions and climate change and provides the tools to evaluate alternative approaches to slowing global warming. The author emphasizes the need to establish effective mechanisms, such as carbon taxes, to harness markets and harmonize the efforts of different countries. This book not only will shape discussion of one the world’s most pressing problems but will provide the rationales and methods for achieving widespread agreement on our next best move in alleviating global warming.
- Yale University Press
- Publication date:
- Edition description:
- New Edition
- Product dimensions:
- 5.70(w) x 8.30(h) x 1.00(d)
Table of Contents
Summary for the Concerned Citizen 1
Background and Description of the DICE Model 30
Derivation of the Equations of the DICE-2007 Model 38
Alternative Policies for Global Warming 65
Results of the DICE-2007 Model Runs 80
The Economics of Participation 116
Dealing with Uncertainty in Climate-Change Policy 123
The Many Advantages of Carbon Taxes 148
An Alternative Perspective: The Stern Review 165
Summary and Conclusions 192
Equations of the DICE-2007 Model 205
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William Nordhaus, Sterling Professor of Economics at Yale University, urges a global carbon tax to cut carbon emissions.
He admits, ¿on the side of climate damages, our knowledge is very meagre.¿ Yet he then writes that his `best guess¿ is that climate damage will cost 2.5% of world output per year by 2100, if emissions are not cut. But the Intergovernmental Panel on Climate Change says that with the forecast 3oC increase, ¿Globally, the potential for food production is projected to increase.¿ What could be more important than increasing food production?
Nordhaus rightly attacks three recent proposals: the Stern Review¿s proposal, backed by the Brown government, of an 85% global cut in emissions by 2050, Al Gore¿s proposed 90% cut in US emissions by 2050, and the German government¿s proposal to cut global emissions to 50% of 1990¿s levels by 2050. Nordhaus points out that all three proposals would cause great damage, because they would all cost huge amounts in the short term, about $17-22 trillion each.
Nordhaus also attacks the Kyoto Protocol as too dear. Its adherents hurt themselves by adding to their production costs. He admits that a stronger Kyoto ¿would involve strenuous efforts virtually without precedent among international agreements.¿
But so would the global carbon tax that he proposes. If every nation imposed the tax, it would cost $2 trillion. He says that this tax should be $27 per ton of carbon at first. In the USA, this would add 9 cents to the price of a gallon of petrol and 10% to the price of coal-generated electricity. The total US tax take would be $50 billion a year. He wants the tax to rise to $90 per ton by 2050 and to $200 by 2100.
But any country fool enough to impose this tax would force its energy-using industries abroad to some country that didn¿t impose the tax. So the tax wouldn¿t cut global emissions, but it would cut living standards in countries that imposed it.