The Stern Review of the Economics of Climate Change: A Comment

The Stern Review of the Economics of Climate Change (Stern et al., 2006) is a report to the Prime Minister and the Chancellor of the Exchequer of the United Kingdom. A team of 23 people, led by Sir Nicholas Stern and supported by many consultants, worked for a little over a year to produce a report of some 700 pages on the economics of climate change. The report says many things, some better supported than others. I agree with the Stern Review on a number of things. Firstly, climate change is real, and climate change is a problem. Secondly, climate policy should be guided (but not dictated) by an assessment of the costs and benefits of greenhouse gas emission abatement. Thirdly, climate policy is best implemented with market-based instruments such as taxes and tradable permits.

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