Economic Analysis of Climate Change Policy: Stern Report and Arrow

This report provides a comprehensive economic analysis of climate change policy, focusing on the reduction of greenhouse gas emissions, particularly CO2, in light of the Stern Report and Kenneth J. Arrow's critique. The report explores the controversies surrounding the costs and benefits of reducing CO2 emissions, examining Arrow's arguments on social time preference and the justification of costs. It details the impact of greenhouse gas emissions on global temperatures, food security, and sea levels, supported by data and diagrams. The analysis further delves into market failures, such as externalities, and discusses various methods for reducing CO2 emissions, including technological advancements and reforestation. The report also examines the implications of the social discount rate and its impact on climate change policy, concluding with a discussion on the importance of addressing climate change to avoid future economic and environmental damages.