There is broad scientific consensus that the global climate is changing, and that this is a result of human activities. There is also a rather broad political consensus that we need to intervene: we need to decrease our emissions of greenhouse gases. But how to induce our economies to curb emissions is much less clear. Economics offers tools to help the world in this respect: economists have systematic methods for comparing different policy paths, because - essentially by design - our science is about understanding how economies respond to interventions. This lecture discusses what economists have contributed so far to fulfil this important task and what they potentially can do, along with some concrete examples of research.
Suboptimal Climate Policy