New frontiers in the economics of climate change


The year 2009 promises to be decisive for climate policy. In December, 190 countries will gather in Copenhagen attempting to forge an agreement to succeed the Kyoto Protocol. Most prominently, they will attempt to reach agreement on reductions in greenhouse gas emissions.

But the negotiations include a number of other important issues, such as the arrangements for industrialised countries to fund adaptation in developing countries. At the same time, the 44th President of the United States, Barack Obama, has promised a sea-change in White House policy, supporting national emissions targets and a cap-and-trade programme to deliver them.

Yet all of this is proceeding against the backdrop of an unfolding global economic downturn, which at the time of writing is forecast to result in the weakest economic performance worldwide since 1945 (IMF 2009). The importance of climate-change economics should be clear.

This special issue of Environmental and Resource Economics was originally conceived as an ‘adversarial collaboration’ between an author of the Stern Review on the Economics of Climate Change (SD, contributing to Stern 2007), and a critic (DJM, in Maddison 2007). However, it is testament to the vitality of the discipline that our agenda for this issue has moved on. Rather than convening a symposium on the merits of the Stern Review (of which there have been several, in for instance Climatic Change, the Journal of Economic Literature, the Review of Environmental Economics and Policy, and World Economics), we collect together what are in our view some of the best examples of new economic research on climate change. Taken together, they look beyond the debate about the Stern Review and offer important insights for the design of future climate policy.


Dietz, S., and Maddison, D.J. July 2009. New frontiers in the economics of climate change. Environmental and Resource Economics, v.43.