This unique and erudite second edition can be used at three different levels – advanced undergraduate, post-graduate and doctoral. It comprehensively covers the critical issues on the economics of climate change and climate policy features and clearly identifies the specific sections each level of reader should explore. Topics include the costs and benefits of adaptation and mitigation, discounting, uncertainty, policy instruments, and international agreements. Lectures can be combined with exercises, guided reading, or the building and application of an integrated assessment model. The book is accompanied by a website with background material, data, opinion pieces and videos. Although primarily intended for use in the classroom, anyone with an interest in climate policy can use this text as a reference.

"The internalisation of external costs is a key element for the implementation of sustainable development in Europe. The so-called "ExternE methodology" has been updated in order to better quantify the social and environmental damages of energy, especially those provoked by air pollution coming from energy production and consumption. In order to improve the quality of the environment and to reduce the negative impacts from pollution on human health, policy choices have to be made. These choices need to be based on a complete and coherent methodology for accounting for external costs." --Editor.