| Summary: | Gary Becker, Kevin Murphy, and Robert Topel's (BMT), "On the Economics of Climate Policy," is an important paper that deepens our understanding of what some have referred to as the challenge of our generation. It is an excellent example of how basic price theory can be used to gain a better understanding of the world. The paper is filled with insights, including how to determine the appropriate discount rate to value investments in climate mitigation, the importance of the distribution of damages across the population, the smaller than expected costs of delay in undertaking research and development programs for clean energy sources, and a cogent defense of analyzing investments in carbon mitigation with standard cost-benefit tools.
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