Query: While preventing global warming is relatively cheap, economists can't even accurately estimate the accelerating costs of climate damages if we continue with business-as-usual.

Relevant passages:
Carbon tax <=SEP=> A carbon tax is a tax levied on the carbon content of fuels . It is a form of carbon pricing . Carbon is present in every hydrocarbon fuel ( coal , petroleum , and natural gas ) and converted to carbon dioxide and other products when combusted . In contrast , non-combustion energy sources -- wind , sunlight , geothermal , hydropower , and nuclear -- do not convert hydrocarbons to . is a heat-trapping `` greenhouse '' gas which represents a negative externality on the climate system ( see scientific opinion on global warming ) . Since GHG emissions caused by the combustion of fossil fuels are closely related to the carbon content of the respective fuels , a tax on these emissions can be levied by taxing the carbon content of fossil fuels at any point in the product cycle of the fuel .   Carbon tax offers social and economic benefits . It is a tax that increases revenue without significantly altering the economy while simultaneously promoting objectives of climate change policy . The objective of a carbon tax is to reduce the harmful and unfavorable levels of carbon dioxide emissions , thereby decelerating climate change and its negative effects on the environment and human health .   Carbon taxes offer a potentially cost-effective means of reducing greenhouse gas emissions . From an economic perspective , carbon taxes are a type of Pigovian tax . They help to address the problem of emitters of greenhouse gases not facing the full social cost of their actions . Carbon taxes can be a regressive tax , in that they may directly or indirectly affect low-income groups disproportionately . The regressive impact of carbon taxes could be addressed by using tax revenues to favour low-income groups .   A number of countries have implemented carbon taxes or energy taxes that are related to carbon content . Most environmentally related taxes with implications for greenhouse gas emissions in OECD countries are levied on energy products and motor vehicles , rather than on emissions directly .   Opposition to increased environmental regulation such as carbon taxes often centers on concerns that firms might relocate and/or people might lose their jobs . It has been argued , however , that carbon taxes are more efficient than direct regulation and may even lead to higher employment ( see footnotes ) . Many large users of carbon resources in electricity generation , such as the United States , Russia , and China , are resisting carbon taxation .

Effects of global warming <=SEP=> The effects of global warming are the environmental and social changes caused ( directly or indirectly ) by human emissions of greenhouse gases . There is a scientific consensus that climate change is occurring , and that human activities are the primary driver . Many impacts of climate change have already been observed , including glacier retreat , changes in the timing of seasonal events ( e.g. , earlier flowering of plants ) , and changes in agricultural productivity .   Future effects of climate change will vary depending on climate change policies and social development . The two main policies to address climate change are reducing human greenhouse gas emissions ( climate change mitigation ) and adapting to the impacts of climate change . Geoengineering is another policy option .   Near-term climate change policies could significantly affect long-term climate change impacts . Stringent mitigation policies might be able to limit global warming ( in 2100 ) to around 2 ° C or below , relative to pre-industrial levels . Without mitigation , increased energy demand and extensive use of fossil fuels might lead to global warming of around 4 ° C. Higher magnitudes of global warming would be more difficult to adapt to , and would increase the risk of negative impacts .

Stern Review <=SEP=> The Stern Review on the Economics of Climate Change is a 700-page report released for the Government of the United Kingdom on 30 October 2006 by economist Nicholas Stern , chair of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics ( LSE ) and also chair of the Centre for Climate Change Economics and Policy ( CCCEP ) at Leeds University and LSE . The report discusses the effect of global warming on the world economy . Although not the first economic report on climate change , it is significant as the largest and most widely known and discussed report of its kind .   The Review states that climate change is the greatest and widest-ranging market failure ever seen , presenting a unique challenge for economics . The Review provides prescriptions including environmental taxes to minimise the economic and social disruptions . The Stern Review 's main conclusion is that the benefits of strong , early action on climate change far outweigh the costs of not acting . The Review points to the potential impacts of climate change on water resources , food production , health , and the environment . According to the Review , without action , the overall costs of climate change will be equivalent to losing at least 5 % of global gross domestic product ( GDP ) each year , now and forever . Including a wider range of risks and impacts could increase this to 20 % of GDP or more , also indefinitely . Stern believes that 5 -- 6 degrees of temperature increase is `` a real possibility . ''   The Review proposes that one percent of global GDP per annum is required to be invested to avoid the worst effects of climate change . In June 2008 , Stern increased the estimate for the annual cost of achieving stabilisation between 500 and 550 ppm CO2e to 2 % of GDP to account for faster than expected climate change .   There has been a mixed reaction to the Stern Review from economists . Several economists have been critical of the Review , for example , a paper by Byatt et al. ( 2006 ) describes the Review as `` deeply flawed '' . Some economists ( such as Brad DeLong and John Quiggin ) have supported the Review . Others have criticised aspects of Review 's analysis , but argued that some of its conclusions might still be justified based on other grounds , e.g. , see papers by Martin Weitzman ( 2007 ) and Dieter Helm ( 2008 ) .

Economics of global warming <=SEP=> The economics of global warming concerns the economic aspects of global warming ; this can inform policies that governments might consider in response . A number of factors make this a difficult problem from both economic and political perspectives : it is a long-term , intergenerational problem ; benefits and costs are distributed unequally both within and across countries ; and scientific and public opinions may diverge .   One of the most important greenhouse gases is carbon dioxide . Around 20 % of carbon dioxide which is emitted due to human activities can remain in the atmosphere for many thousands of years . The long time scales and uncertainty associated with global warming have led analysts to develop `` scenarios '' of future environmental , social and economic changes . These scenarios can help governments understand the potential consequences of their decisions .   The impacts of climate change include the loss of biodiversity , sea level rise , increased frequency and severity of some extreme weather events , and acidification of the oceans . Economists have attempted to quantify these impacts in monetary terms , but these assessments can be controversial .   The two main policy responses to global warming are to reduce greenhouse gas emissions ( climate change mitigation ) and to adapt to the impacts of global warming ( e.g. , by building levees in response to sea level rise ) . Another policy response which has recently received greater attention is geoengineering of the climate system ( e.g. injecting aerosols into the atmosphere to reflect sunlight away from the Earth 's surface ) .   One of the responses to the uncertainties of global warming is to adopt a strategy of sequential decision making . This strategy recognizes that decisions on global warming need to be made with incomplete information , and that decisions in the near term will have potentially long-term impacts . Governments might choose to use risk management as part of their policy response to global warming . For instance , a risk-based approach can be applied to climate impacts which are difficult to quantify in economic terms , e.g. , the impacts of global warming on indigenous peoples .   Analysts have assessed global warming in relation to sustainable development . Sustainable development considers how future generations might be affected by the actions of the current generation . In some areas , policies designed to address global warming may contribute positively towards other development objectives . In other areas , the cost of global warming policies may divert resources away from other socially and environmentally beneficial investments ( the opportunity costs of climate change policy ) .