Why is the economics of climate change so difficult and controversial?

Abstract

The main goal of this lecture is to explain some of the reasons why the economics of climate change is such a frustrating subject. I will try to sketch a brief general overview of the economics of climate change, with emphasis on why this particular application of economic analysis presents special -- almost unique -- challenges to the economics profession. I think it is important for the educated public to grasp why it is so difficult and controversial for an economist to give sharp overall advice concerning what to do about climate change -- and why there are so many differences of opinion. I quickly cover topics like treatment of uncertainty, inter-generational discounting, international public goods, catastrophic climate change, and geoengineering