Despite the importance of as comprehensive as possible damage cost estimates to cost benefit analyses of global attempts to reduce greenhouse gas emissions, few researchers have attempted to monetize the direct impact of climate change on households. This study uses the hedonic technique to measure the amenity value of the climate to German households. Evidence suggests that the amenity value of climate variables is capitalized mainly into hedonic house price differentials. Overall, German households appear to prefer warmer winters with less rainfall. Combining estimates of amenity values with the predicted changes in climate associated with the IPCC's A2 emissions scenario we find that the overall impact of climate change on German households, whilst negative, is typically not statistically different from zero. This occurs in part because the prediction is for warmer but wetter winters and also because the amenity value of some climate variables cannot be measured with sufficient precision.

This text develops and applies a far-reaching account of the economic value of climate, derived from its amenity value or the benefits which a particular climate provides to the people of that region or country. As climate change moves higher on the economic and political agendas, reliable measures of the benefits and costs of specific climates and changes to them become ever-more critical. Detailed studies of a range of countries including Britain, the US, India and Russia, show that the mobility of the population is crucial. When individuals are able to move, the amenity value of the climate is reflected in land prices and wage rates. Without mobility, amenity values emerge in patterns of purchasing, either to compensate for the disadvantages of the climate or to make best use of it. Indices are generated for the cost of living as a function of climate variables, and optimal climates are identified to determine who wins and who loses from climate change.

The aim of this thesis is to address certain aspects of climate change which have not attracted sufficient attention. The first part is an empirical one investigating impacts of climate change on households and individuals using the hedonic price approach (for Great Britain and Germany). In addition, we examine the relationship between climate and happiness (for 67 countries). The second part of the thesis is an analytical one in the field of emissions permit trading. As progress in the international negotiations is extremely slow and failure is not excluded we first consider the coordination of domestic markets for tradable emission permits where countries determine their own emission reduction targets. Another aspect which has not attracted sufficient attention is the time-dimension of a trading scheme. We analyse the dynamic aspects of allocating emission rights for different approaches in the final chapter.

The first edition of this important work was the winner of the 2002 Publication of Enduring Quality award by the Association of Environmental and Resource Economists. The continuing premise for the book is that estimates of the economic values of environmental and natural resource services are essential for effective policy-making. As previous editions, the third edition, which includes two additional co-authors, presents a comprehensive treatment of the theory and methods involved in estimating environmental benefits. Researchers, policy-makers, and practitioners will welcome the work as an up-to-date reference on recent developments. Students will gain a better understanding of the contribution that economics as a discipline can make to decisions concerning pollution control and human health, recreation, environmental amenities, and other critical issues concerning the way we use and interact with environmental and natural resource systems. To reflect recent progress in both the theory and practice of non-market valuation, the third edition includes more details on empirical approaches to measurement, expanded discussion of the reasons for divergence between "willingness to pay" and "willingness to accept compensation," and increased coverage of econometric issues encountered in estimation. In keeping with its cutting edge orientation, it also includes more discussion of survey design, equilibrium sorting models, and the implications of behavioral economics for welfare measurements and benefit cost analysis.

Climate change mitigation is still possible, if innovative economic policies are implemented, such as those provided by this book: a large array of proposals by 30 economists from developing and developed countries. High and senior level policymakers (and their staff) will find fundamental outlines and insights for negotiating and laying down NAMAs (Nationally Appropriate Mitigation Actions) and Climate Action Plans at national, sub-national, city and sectoral levels. With more than 20 "recipes", this book is revolutionary because: 1. it leads the reader from the context to the implementation details; 2. it reverses classical textbook proportions of "90%%%% analysis and 10%%%% proposals" in favor of "90%%%% proposals and 10%%%% analysis"; 3. it relates each policy to a number of co-benefits to synergize climate mitigation with employment, competitiveness, and happiness. This second edition 2012 builds upon the experience gained in implementation worldwide.