This thoroughly revised third edition offers comprehensive coverage of the economics of climate change and climate policy, and is a suitable guide for advanced undergraduate, postgraduate, and doctoral students. Topics discussed include the costs and benefits of adaptation and mitigation, discounting, uncertainty, equity, policy instruments, the second best, and international agreements. Key features: In-depth treatment of the economics of climate change Careful explanation of concepts and their application to climate policy Customizable integrated assessment model that illustrates all issues discussed Specific usage guidelines for each level of reader Companion website with data, quizzes, videos, and further reading Discussion of the latest developments in theory and policy Greater attention to policy and market imperfections than in the second edition. This book is an essential text for students in economics, climate change, and environmental policy, an excellent resource for researchers and practitioners, and a key text to support professors in their teaching.

Preface Introduction 1. The science of climate change Tweet book Processes Projections Further reading 2. Emissions scenarios and options for emission reduction Tweet book Sources of greenhouse gas emissions Trends in carbon dioxide emissions Scenarios of future emissions Options for emission reduction Further reading Exercises 3. Abatement costs Tweet book The costs of emission reduction Negative abatement costs Further reading Exercises. 4. Policy instruments for emission reduction Tweet book The justification of public policy Direct regulation Market-based instruments Cost-effectiveness Dynamic efficiency Environmental effectiveness Taxes versus tradable permits under uncertainty Initial allocation of permits Initial and final allocation of permits International trade in emission permits Technological change Emissions trade in practice: The EU Emissions Trading System Emissions trade in practice: The Clean Development Mechanism Further reading Exercises 5. Impacts and valuation Tweet book Impacts of climate change Purpose of valuation Valuation methods: Revealed preferences Valuation methods: Stated preferences Issues for climate change: Benefit transfer Issues for climate change: WTP versus WTAC Further reading Exercises. 6. Impacts of climate change Tweet book Reasons for concern Total economic impacts Impacts and development Marginal economic impacts The growth rate of the marginal impact Further reading Exercises 7. Climade and development Tweet book Growth models Natural disasters Poverty traps Further reading Exercises 8. Optimal climate policy Tweet book The ultimate target Benefit-cost analysis Estimates of optimal emission reduction Trade-offs between greenhouse gases Further reading Exercises. 9. Discounting, equity, uncertainty Tweet book Time discounting: Derivation of the Ramsey rule Time discounting Declining discount rates Axiomatic approaches to intertemporal welfare Equity Derivation of equity weights Uncertainty Ambiguity Deep uncertainty Implications for climate policy The choice of parameters Science and advocacy Further reading Exercises 10. Irreversibility and learning Tweet book Introduction A stylized example Applications to climate change Further reading Exercises. 11. International environmental agreements Tweet book Cooperative and non-cooperative abatement Free-riding Cartel formation Multiple coalitions International climate policy Further reading Exercises 12. Adaptation policy Tweet book Adaptation versus mitigation The governement's role in adaptation Adaptation and development How to adapt Further reading Exercises. 13. Building an integrated assessment model Introduction Carbon cycle and climate Scenarios Abatement Tradable permits Impacts of climate change Social cost of carbon Development Optimal climate policy Discounting and equity Uncertainty Non-cooperative climate policy Adaptation policy 14. How to solve the climate problem? Tweet book The problem Costs and benefits of climate policy Complications The solution Further reading Index.