ABSTRACT
This chapter reviews the economic assessment of climate change damages as presented in D. W. Pearce et al. It addresses the choice between willingness to pay (WTP) and willingness to accept (WTA), the extrapolation of local case study estimates to other regions, and equity weights. Valuation is based on a mix of WTP, occasionally WTA, and various approximations, including benefit transfers. The choice between WTP and WTA constitutes an implicit statement about prevailing property rights, and this is sometimes used as a guideline for the choice of concept. The distinction between WTP and WTA is thus blurred for impact estimates. It is an empirical fact that economic values derived under a WTP framework tend to differ from estimates that measure the same damage using WTA. The climate-change damage cost literature relies heavily on benefit transfer. This is a short cut, in which WTP/WTA results obtained in one study are transferred to a new problem.
