ABSTRACT
The cost-benefit approach attempts to define the optimum level of greenhouse gas concentration in the atmosphere, whereas the cost-effectiveness approach attempts to link a given initiative to a consistent carbon value with the aim of reducing emissions. Since the early 1990s when people became more aware of anthropogenic influence on climate change, economists have tried to attribute a monetary value to Greenhouse gas emissions. In the 2000s, various countries including France and the United Kingdom funded work to estimate or set the value of carbon. The value of carbon does indeed go down as emission-reduction goals rise, as less significant damage will be caused if there are ambitious reduction goals. Impact assessments establish the cost of annual damage caused by doubling the concentration of CO2 in the atmosphere as a few percentage points of Gross Domestic Product. However, the cost would be proportionally a lot higher for developing countries than for industrialized countries.
