ABSTRACT
In this chapter, the authors summarize economic approaches discussed in literature that are linked to the carbon crisis. It starts by elucidating the different perspectives available in terms of how they assess future costs of climate change and discusses abatement costs that occur when mitigating climate change effects. In the economic literature there exist different views about how future costs associated with climate change should be estimated. The chapter considers the input dimension of carbon constraints, and focuses on the extraction costs of resources and the corresponding pricing mechanisms. The abatement cost curve is often criticized for neglecting certain risks, costs, and socio-psychological factors. A dynamic model of the potential causes of the crisis and resulting effects on society and business would at a minimum include the human, organizational, technological, regulatory, infrastructure, and preparedness elements. The chapter concludes that a deeper understanding "beyond carbonomics" is required to illustrate the business case for the strategic management of the global carbon crisis.
