The Economics of Strategies to Reduce Greenhouse Gas Emissions

  • Lisa J. Cameron
  • W. David Montgomery
  • Harry L. Foster


Numerous engineering studies claim that certain energy-efficient technologies pay for themselves, while at the same time reducing carbon emissions that contribute to climate change. These studies often proceed to argue that government policy should be used to promote such technologies, because they would be sound investments even if it were discovered that climate change itself did not produce significant damages. Our study establishes a framework for evaluating these claims. We review several prominent engineering-based studies in light of our framework and show that the role for beneficial policy intervention is much more limited than engineering-based studies would suggest.