In the debate over global warming, the relevant economic concern is to weigh the costs of taking action against the costs of doing nothing. As global warming is a theory and not a fact, doing nothing about it might indeed be costless. But, even if global warming is occurring, many scientists agree that delaying action by 15 to 25 years would not impose serious additional costs. Furthermore, the costs of any global warming that might be occurring (whether the result of human activities or not) are likely to be exaggerated. Several of the authors in this book show that there may be benefits from warming.

Much attention in the debate over global warming has been focused on economic questions like the following. How much is reducing carbon dioxide emissions likely to cost? Should targets for countries be uniform or differentiated? What is the best way to achieve the proposed reductions? Carbon taxes? Emissions permits? Command-and-control style regulation? It is important to note that many of the economic models suffer from the same problem that the models of climatic change do: they are all predictions based on a particular set of assumptions. If the assumptions are changed, the predictions of the economic models change as well. These assumptions concern the model structure, demographic projections, economic growth projections, policy options chosen, and the cost and availability of long-term supply options. There is a wide range of possible outcomes including those that predict that some form of carbon reduction would improve economic performance. However, given current dependence on fossil fuel, economists are reasonably certain that in the absence of any major technological breakthroughs, dramatically reducing carbon dioxide emissions would be very costly, at least in the short term.