New book by USC professor details the economics of climate change policies

"Even though many economists believe we have no business addressing this value-laden subject, I contend that it's useful to policy makers to know the relative cost to partners involved in reducing climate change before making any wide-scale decisions," he said. "Across-the-board percentage cuts, or basing such decisions on rules of thumb like population numbers, are simplistic solutions that don't take into account the magnitude of the problem and the differing perspectives of negotiating parties."

The book provides extensive background in topics such as balancing climate policies with equity issues, exploring the regional and national economic impacts of climate change and remedial policies, and examining the design of cap and trade systems.

Chapters within the book's six sections include:

• Greenhouse Gas Reduction Policy in the United States: Identifying Winners and Losers in an Expanded Permit Trading System. This chapter examines how flexibility in any cap and trade system is preferable to limiting it to just the straight mitigation of carbon dioxide emissions. Rose found that expanding emissions allowance trading to include methane
 mitigation and carbon sequestration reduced the cost to businesses of
 purchasing a mitigation allowance from $138 per ton of carbon-equivalent
 warming potential to $33 per ton. Effectively, this enables a company with a high 
mitigation cost to subsidize the same amount of emission reduction in a 
company that has a low cost.
• International Equity and Differentiation in Global Warming Policy: This was the first paper to objectively quantify a broad set of equity principles so that they could be properly measured in formal models.
• Climate Change Policy Formation in Minnesota: The Case for a Regional Approach. Rose and his co-authors estimated that Minnesota could reduce ten percent of its emissions by 2025 at a zero or negative-cost savings by enacting policies such as green building guidelines, forestry management and increased biofuel production. Moreover, it could reduce the cost of achieving a cap of 30% below year 2005 levels in 2025 by 25% by joining other states in trading emission allowances.

Book information: The Economics of Climate Change Policy: International, National and Regional Mitigation Strategies by Adam Rose (Edward Elgar Publishing, 2009).

Contact information for Adam Rose: Rose is a professor at the USC School of Policy, Planning and Development. Dr. Rose is also a faculty affiliate of the USC Energy Institute. He can be reached at or 213-740-8022.