ABSTRACT
Estimates of the cost of mitigation differ by orders of magnitude – with allimportant implications for the public debate about climate policy. The Stern Review (Stern 2006) projects that most climate damages could be avoided and the climate stabilized at an annual cost of about 1 percent of world output. On the other hand, Lomborg (2010) argues that the cost of staying under 2°C of warming could be 12.9 percent of world output in 2100. In recent U.S. debates, the extreme positions regarding action or inaction to confront climate change have been based on extreme estimates of costs: business lobbies opposed to climate policy have relied on consultant studies showing ruinous costs from even small initiatives, while environmental groups have developed their own studies showing little or no net cost from ambitious “win-win” solutions (Ackerman et al. 2009; Ackerman et al. 2010).
