ABSTRACT
Climate change is predicted to have severe effects not just in environmental and humanitarian terms, but also in its effects on the economy. According to the economist Sir Nicholas Stern (2006), up to a fifth of global economic wealth could be at risk as a result of climate change impacts. In this chapter we summarize economic approaches discussed in literature that are linked to the carbon crisis. We start by elucidating the different perspectives available in terms of how authors assess future costs of climate change. Next we discuss abatement costs that occur when mitigating climate change effects. Lastly, we consider the input dimension of carbon constraints, by focusing on the extraction costs of resources and the corresponding pricing mechanisms. Based on these insights from economic theory, we conclude that a deeper understanding “beyond carbonomics” is required to illustrate the business case for the strategic management of the global carbon crisis.
