New Climate Economics: Methodological choices and recommendations

Projections of future impacts, benefits and costs of climate mitigation and adaptation policies are based on both detailed empirical research, and modelling choices and assumptions that frame the analysis. For instance, assumptions about the expected growth of population and incomes drive the projections of greenhouse gas emissions. Assumptions about the pace and nature of innovation, the economy-environment-society interactions and the relative value of future versus current resources affect the estimates of the long-run benefits or costs of climate policies. Assumptions about future population health in the business-as-usual scenario affect the estimates of the health benefits or harms of climate change mitigation and adaptation policies. Further, estimates and assumptions regarding climate variability affect the benefits of adaptation measures to tackle potential increases in climate-related extreme events. Also, methodological choices about the treatment of disparate, incommensurable impacts are often decisive for policy decisions.