The Evolution of Economic Policy on Climate Change

ANU Trevor Swan Distinguished Lectures in Economics The lecture traces the outlines of economic thinking on climate change. Two competing paradigms are reviewed: (1) modelling of greenhouse gases mitigation as a dynamic optimal control problem and (2) the willingness to pay of the present generation to ensure future generations against the potential adverse impacts of climate change. The presentation examines the challenges of the economics of international co-operation, the choice of economic instruments for climate mitigation, uncertainty, climate adaptation, abrupt climate change, induced technological change, discounting, and equity considerations.