The world has yet to face a more important environmental policy decision than that to be made about controlling greenhouse-gas emissions. On the one hand, there is the potential threat that climate change will cause large ecological and human impacts; on the other, the trillions of dollars of abatement costs required to curb emissions. Striking a balance between the implied threat and those immense costs is an imposing challenge.
This essay discusses the near revolution that has occurred over the past decade in our understanding of the impacts of climate change. Both the natural science and the economics underlying predictions of climate-change impacts have altered dramatically. We now have a perspective entirely different from that of a decade ago on what climate change is likely to do to the economy and to our quality of life.
The new research suggests that climate warming will not be as harmful as we once thought it might be. Climate scientists have reduced the magnitude of predicted warming, suggesting milder future climate scenarios. Ecologists have shifted from predicting ecosystem collapse to predicting that net primary productivity will likely increase over the long run. And economists are no longer predicting large damages, but rather a mixture of damages and benefits.