Climate change and the global economy

limate change is a potentially cata- strophic global externality and one of the world's greatest collective action problems. The distribution of causes and effects is highly uneven across countries and across generations. Enormous uncertainty surrounds existing estimates of future damages that may result from climate change, but these potential damages are to a considerable extent irreversible and may be catastrophic if global warming is unchecked. The costs of abating climate change also have a sunk component— that is, cannot be fully recovered—and are