Table of Contents

An Introduction to the Economics of Climate Change Policy

Foreword     ii

Executive Summary     iii

I. Introduction   1

II. An Economics Approach to Climate Change Policy Analysis   3

1. Analytical Frameworks   3
2. The Role of Energy Prices   5

III. Five Determinants of Climate Change Cost Estimates   8

1. Projections of Base Case Emissions and Climate Damages   8
2. The Climate Policy Regime Considered   10
3. Representation of Substitution Possibilities by Producers and Consumers   14
4. Technological Change   20
5. Characterization of Benefits   25

IV. Information and Insights From Applications of Economic Models   30

1. Base Case Emissions Projections   30
2. The Climate Policy Regime Considered   32
3. Substitution Opportunities   36
4. Technological Change   38
5. Benefits of Emissions Reductions   42

V. Conclusions   44

Endnotes   47

References   49