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Which principles should be the bases of our decisions about how to respond to climate change? It is a ubiquitous question, almost a banality, but nevertheless an important one. It has plagued debates about climate change since its emergence as a problem in the late 1980s; differences between particular responses can be traced back to differing underlying assumptions about which normative principles are appropriate and justifiable.
The books under review provide exemplary expressions of two specific ways to respond to this question. Both are engaging, well written, clearly structured, and cogently argued. Both set out their assumptions clearly and proceed carefully to conclusions, taking on the various objections explicitly. But both present dramatically different accounts of the basis on which we should proceed.
William Nordhaus has been prominent in debates within economics about climate change since the early 1990s. A Question of Balance is the presentation of the data from the latest version of his model, known as DICE (dynamic integrated model of climate and the economy). His purpose is to design a model that describes the main elements of those parts of the economy relevant to greenhouse gas emissions, as well as the principal dynamics of the climate system. He can thus ask questions of the model to determine what would be the outcome--in terms of rates of emissions, warming, costs of impacts, and abatement measures--of different types of policy responses. His normative frame of reference is, very explicitly, economic optimization; he seeks to defend policies that generate the lowest overall costs to the global economy.
The book develops the assumptions in the model, describes how it is constructed, and then offers a number of runs of the model with variations in some key assumptions. Nordhaus then discusses some debates about key issues that affect differing assessments among economists concerning climate change policy. These discussions center on the question of how broad participation in a climate regime needs to be in order to get an optimal response (Chapter 6); how to deal with the various uncertainties in the models (Chapter 7); the advantages of carbon taxes over other policy tools (Chapter...