We review the historical literature on the economics of climate change with a focus on the evolution of the literature from some of the early classic papers to the latest contributions. We divide the paper into three main sections: trends in greenhouse gas emissions, mitigation, and adaptation.

Tradable permits in greenhouse gases are a key, last-minute provision incorporated in the Protocol agreed in Kyoto in December 1997, but the details of any future scheme remain to be negotiated. If an effective scheme is to be implemented, it needs to take account of issues such as the fact that...

If scarce community resources for emergency services are to be allocated efficiently from a social perspective, decision-makers should be informed by social cost–benefit analysis (CBA). However, this is rarely, if ever, the case in Australia. One reason may be the challenge of estimating...

Scientists consider that some climate change is already inevitable, even if anthropogenic greenhouse emissions are stabilised immediately. Adaptation measures are therefore needed, irrespective of any mitigation action. But policy discussion is focussed on deterministic responses, generally...

Climate projections suggest increased inundation and erosion of beachfront property on the east coast of Australia over the coming century. Protective measures and accommodation to the effects of flooding offer initial lines of defence, but managed retreat will ultimately be required for some...

A factor common to all adaptation measures is the uncertainty that is the hallmark of climate change. The timing, intensity and location of climate change impacts is not known to any degree of precision. Because most deterministic analyses and policy prescriptions ignore this uncertainty, their...

Economists were able to formulate and recommend policy approaches for reducing emissions of greenhouse gases (mitigation) by drawing on an existing body of economic theory related to externalities. However, no comparably straightforward approach has yet emerged in the adaptation literature,...

Increasing attention is being given to adaptation of natural and human systems to climate change. The academic literature covers a wide spectrum of perspectives. Policy considerations, on the other hand, are driven largely by techno-scientific considerations, including in particular a...

A factor common to all adaptation measures is the uncertainty that is the hallmark of climate change. The timing, intensity and location of climate change impacts is not known to any degree of precision. Because most deterministic analyses and policy prescriptions ignore this uncertainty, their...