ABSTRACT
J. M. Reilly noted the role of uncertain damage functions that prevail, and all the authors indicate a general awareness of the overall uncertainties pertaining to the entire area of global change. There is a wide range of conflicting biases that will affect responses to information about global change, making it difficult to predict likely responses and to design policies that will be most effective. One of the major uncertainties affecting policy decisions pertains to regulations that might be issued by the government. These, in effect, are policy-control variables that can be manipulated to foster the control of global warming. If there is a nonlinear relationship between the level of pollution and the economic implications of global warming, then concerns about the effect of other countries' pollution on the base level of global warming will clearly be important. The natural response in situations of uncertainty is to look to insurance as the solution.
