Climatic Change (2009) 96:275–297
DOI 10.1007/s10584-009-9641-z
The economics of climate change: a post-stern
perspective
Geoffrey Heal
Received: 7 November 2007 / Accepted: 8 June 2009 / Published online: 23 July 2009
© Springer Science + Business Media B.V. 2009
Abstract What have we learned from the outpouring of literature as a result of the
Stern Review of the Economics of Climate Change? A lot. We have explored the
model space and the parameter space much more thoroughly. The Stern Review
has catalyzed a fundamental rethinking of the economic case for action on climate
change. We are in a position to give some conditions that are sufficient to provide
a case for strong action on climate change, but we need more work before we have
a fully satisfactory account of the relevant economics. In particular, we need to un-
derstand better how climate change affects natural capital—the natural environment
and the ecosystems comprising it—and how this in turn affects human welfare.
1 Introduction
In November 2006 the U.K. government published The Economics of Climate
Change: The Stern Review, written by a team led by Nicholas Stern (2006). The
publication of the Stern Review provoked an unprecedented outpouring of papers
on the same topic, including an entire issue of The Economists’ Voice and large
collections in the Review of Environmental Economics and Policy and in World
Economics. And many of them were by very distinguished colleagues, so the Stern
Review provoked not only quantity but quality too. What have we learned from
all of this? Are there any emerging conclusions? In particular, what do we have
to assume to make an economic case for prompt and significant action to reduce
greenhouse gas emissions? This, it seems to me, is the really controversial issue,
G. Heal (
B
)
Columbia Business School, Columbia University, 616 Uris Hall,
3022 Broadway, New York, NY 10027-6902, USA
e-mail: gmh1@columbia.edu
URL: www.gsb.columbia.edu/faculty/gheal