The economics of climate change is shaped by the science. That is what dictates the structure of the economic analysis and policies; therefore we start with the science.

Human-induced climate change is caused by the emissions of carbon dioxide and other greenhouse gases (GHGs) that have accumulated in the atmosphere mainly over the past 100 years.

The scientific evidence that climate change is a serious and urgent issue is now compelling. It warrants strong action to reduce greenhouse gas emissions around the world to reduce the risk of very damaging and potentially irreversible impacts on ecosystems, societies and economies. With good policies the costs of action need not be prohibitive and would be much smaller than the damage averted.

Reversing the trend to higher global temperatures requires an urgent, world-wide shift towards a low-carbon economy. Delay makes the problem much more difficult and action to deal with it much more costly. Managing that transition effectively and efficiently poses ethical and economic challenges, but also opportunities, which this Review sets out to explore.

Economics has much to say about assessing and managing the risks of climate change, and about how to design national and international responses for both the reduction of emissions and adaptation to the impacts that we can no longer avoid. If economics is used to design cost-effective policies, then taking action to tackle climate change will enable societies' potential for well-being to increase much faster in the long run than without action; we can be ‘green’ and grow.