An Introduction to the Economics of Climate Change Policy

Some analyses predict that climate change will effect the economy negatively, while others suggest that the economy will benefit from changes. These conflicting forecasts can confuse policy-makers as well as the public. The Pew Center on Global Climate Change commissioned this report to explore the sources of these differences. It concludes that the differences stem from varying economic assumptions, such as views about the ways that the economy responds to fluctuating energy prices. Assumptions also differ about baseline emissions — that is, how much the nation will emit in the absence of any policies or laws.