By William D. Nordhaus
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Extra info for The Climate Casino: Risk, Uncertainty, and Economics for a Warming World
And you wouldn’t know what to make of ice cores from Antarctica because they contain ice rings going back more than half a million years. But modeling is also an art because you have to simplify to capture the essential details. Some models contain information on all the power plants and transmission links in the United States. But even such a T H E E C O N OM I C O R I GI NS O F CLI M AT E CH A NGE 27 huge enterprise cannot represent power generation in other countries, or international trade in electricity, or the interactions with the rest of the economy, or the carbon cycle.
Why is it such a persistent problem? The economics of climate change is straightforward. Virtually everything we do involves, directly or indirectly, the combustion of fossil fuels, which results in emissions of carbon dioxide (CO2) into the atmosphere. The CO2 accumulates over many decades, changes the earth’s climate, and leads to many potentially harmful impacts. The problem is that those who produce the emissions do not pay for that privilege, and those who are harmed are not compensated. When you buy a head of lettuce, you pay for the costs of producing it, and the farmers and retailers are compensated for their efforts.
I like my car, my computer, and my cell phone. I prefer a warm house in the winter and a cool house in the summer. I deﬁ nitely do not want to return to a caveman standard of living. 6% per year) 10 8 6 4 3 2 1 1900 1920 1940 1960 1980 2000 Figure 2. Global CO2 emissions, 1900–2010. 6 percent per year. This upward trend is the source of our worry. These rising emissions are leading to rising CO2 concentrations in the atmosphere, which is what produces climate change. I note here one geeky detail about the ﬁgure: The vertical scale on the diagram, and on several others in this book, is a ratio scale.