Economic Models of Climate Change: A Critique

The climate policy debate has been dominated by economic estimates of the costs of policies to reduce greenhouse gas emissions. Yet the models used to derive those estimates are based on assumptions that have largely gone untested. The conventional approach embodies structural features that rule out alternative market outcomes. In addition, the distribution of 'climate rights' is crucial to determining the economic affects of various policies. Bringing these considerations to the forefront shows how domestic and international policy solutions might be found.

STEPHEN J. DECANIO is Professor of Economics at the University California, Santa Barbara. He received his Ph.D. in Economics from the Massachusetts Institute of Technology and taught at Yale University before going to UCSB. He was recipient of the U.S. Environmental Protection Agency's Stratospheric Ozone Protection Award in 1996.