ABSTRACT
This chapter explores the control option with reduction of Greenhouse Gases (GHG) emissions at source remains the policy most commonly studied by economists. It reviews various attempts at monetary valuation of the impacts of enhancing the Greenhouse Effect and controlling for GHG emissions. Control costs are normally assumed to rise with the reduction in emissions, and be higher the quicker a given reduction is attempted. The benefits function is based upon microeconomic demand theory and welfare measures. Baseline scenarios in cost studies provide the basis of comparison for calculating costs, but are dependent upon an artificial distinction between ‘business as usual’ and policy intervention. Economic research on climate change largely disappeared until the late 1980s and then the major expansion of interest in the area was during the early 1990s. A variety of economic approaches have been applied to the economic impacts from climate change.
