Overview

This book provides a thorough grounding in the science and economics of climate policy issues and draws key lessons from the longer experiences of central banks in grappling with related challenges.

Climate History and Human Impact

Findings and controversies of climate history and the effects of human activities on climate are reviewed.

Risk Management Approaches

The author describes similarities in risk management approaches for climate and monetary policy.

Goals and Frameworks

Overall goals and frameworks for addressing climate change risks are assessed.

Policy Options

Command-and-control and market-based options are compared (including performance standards, taxes and cap-and-trade).

Market-Based Approaches

Market-based approaches sometimes require a choice between prices and quantities as policy instruments. However, the author discusses how techniques of central bank interest rate management can be adapted in a hybrid climate policy approach to achieve environmental goals while making carbon prices predictable and also ensuring well-functioning carbon markets.

Key Lessons

Key lessons are offered for improving existing and future national and international climate policy architectures.