The Climate Casino: Applying Economic Reasoning to the Problem of Global Warming
“Global warming,” William Nordhaus declares, “is one of the defining issues of our time. It ranks along with violent conflicts and economic depressions as a force that will shape the human and natural landscapes for the indefinite future.” In his new book, The Climate Casino: Risk, Uncertainty, and Economics for a Warming World, Nordhaus first outlines the costs that climate change poses to the world, then presents a series of solutions that could alleviate the problem. The title of the book alludes to the uncertainty inherent in predicting future changes, as Nordhaus explains in his introduction:
[E]conomic growth is producing unintended but perilous changes in the climate and earth systems. These changes will lead to unforeseeable and probably dangerous consequences. We are rolling the climatic dice, the outcome will produce surprises, and some of them are likely to be perilous. But we have just entered the Climate Casino, and there is time to turn around and walk back out. This book describes the science, economics, and politics involved—and the steps necessary to undo what we are doing.
As one of the pioneers in the economics of climate change, Nordhaus has studied and written extensively about global warming for the past forty years. He is Sterling Professor of Economics at Yale University, member of the National Academy of Sciences and a Fellow of the American Academy of Arts and Sciences. Through the careful application of economic reasoning and statistical analysis, he has led the way in researching the economic costs of climate change.
His DICE (Dynamic Integrated Climate-Economy) model is arguably the best known and most influential economic model of optimal climate policy. Outlined in a previous book published by Yale University Press, A Question of Balance, DICE combines projections of climate change with projections of economic growth, then computes how they might affect each other—thereby helping to determine the most efficient path for combating climate change. The Climate Casino is a continuation of that effort to understand global warming through the lens of economics. As described in a recent New York Times review, the book is a “one-stop source on global warming, seen through the prism of a brilliant economist.”
In The Climate Casino, Nordhaus makes clear his position that global warming is a real and serious threat, and that it is the result of human activity. By presenting the evidence from climate science, he proves that our burning of fossil fuels has increased the amount of carbon dioxide in the atmosphere, thus raising temperatures and sea levels, as well as intensifying natural disasters like hurricanes. Oceans will also become more acidic, affecting sealife adversely. When the temperature rise passes 2°C, economic costs will start piling up. Nordhaus then introduces key actions that the global community can take to mitigate these costs, most significantly a carbon tax. The best way to control pollution is to put a price on emissions, so that firms and individuals have an incentive to cut back.
As a well-respected economist whose work has the power to shape economic decisions and environmental responses on a global scale, Nordhaus is committed to elucidating the harrowing problem of climate change with rational, well-evidenced analysis. Amidst the heated debates in the vexed field of global warming economics, The Climate Casino puts forth a cool-headed blueprint for a better future.