Question

What problems are associated with cost-benefit when addressing the problem of climate change?

Answer 1

The cost-benefit analysis is effective when costs and benefits are very explicit and can be identified and measured easily. In the case of climate change, the costs and benefits are not easy to identify and measure. For example, we cannot easily find out the economic costs in terms of loss in output, income, and employment due to efforts are taken to address climate change. Similarly, we cannot easily identify and measure the benefits of averting climate change. So, it is not very effective to conduct a cost-benefit analysis.