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C
limatology is an uncertain
science. Future projections
will change, based on
human actions and new technology,
as well as natural cycles. However,
it is vitally important to assess
the financial impacts of climate
change. Once potential costs are
understood, we can explore ways
in which to mitigate its direct
impacts. It is necessary to consider
not only the direct costs—such as
damage to property from flooding
or fire—but also the costs
associated with broader effects,
such as a decline in biodiversity,habitat destruction, shifts in
growing seasons, and enforced
human migration.Counting the cost
The social cost of carbon (SCC) is
a monetary estimate of the damage
to human society caused by every
additional tonne of carbon dioxide
released into the atmosphere.IN CONTEXT
KEY FIGURE
William Nordhaus (1941–)BEFORE
1993 In Reflections on the
Economics of Climate Change,
William Nordhaus summarizes
the issues surrounding climate
change and the economy,
highlighting uncertainties
and potential solutions.AFTER
2008 In Common Wealth:
Economics for a Crowded
Planet, Jeffrey Sachs argues
that although humanity faces
daunting economic crises—
including that of climate
change—we have the
knowledge to address them.2013 The Climate Casino:
Risk, Uncertainty, and
Economics for a Warming
World, by William Nordhaus,
explains how global warming
relates to the world’s economy,
and provides ideas for
reducing its impact.Protesters in Lamu, Kenya,
in 2018, opposing the construction
of a coal-fired power plant. Growing
awareness of ecological damage has
seen an increase in public disapproval.WE ARE
PLAYING DICE
WITH THE NATURAL
ENVIRONMENT
THE ECONOMIC IMPACT OF CLIMATE CHANGE
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