THE ECONOMICS OF CLIMATE CHANGE: COST-BENEFIT ANALYSIS OF GREEN POLICIES

Abstract

The economics of climate change represents a critical area of study in understanding the balance between economic growth and environmental sustainability. This paper explores the cost-benefit analysis of green policies, highlighting their potential to mitigate climate change impacts while promoting sustainable development. Key elements of the analysis include assessing the financial costs of implementing green initiatives, such as renewable energy investments, carbon taxation, and energy efficiency programs, against the long-term benefits, including reduced greenhouse gas emissions, climate resilience, and economic opportunities in green industries. The research underscores the importance of incorporating environmental externalities into policy decisions to ensure equitable and effective outcomes. By examining case studies and models, the paper also provides insights into the economic trade-offs and policy frameworks that governments can adopt to address climate challenges. The findings emphasize that proactive green policies, though associated with short-term costs, yield significant long-term benefits in terms of economic stability, public health, and environmental preservation.