Viewpoint: Economic Theory and Climate Change Policy
1999What is the appropriate role for economics in the development of climate change policy? Ideally, when formulating public policy, decision-makers should rely on expertise from a variety of disciplines, economics among them. Yet economics is often looked upon as the ultimate arbiter of policy choices, because it seems to offer something the other sciences do not: a theoretical framework capable of valuing the consequences of different policy choices with a single metric. This paper argues that this practice is not legitimate, and that most economic policy assessment models, in their current forms, are biased against non-marginal policy changes such as those required to meaningfully address the challenges of climate change.