This thoroughly revised third edition offers comprehensive coverage of the economics of climate change and climate policy, and is a suitable guide for advanced undergraduate, postgraduate, and doctoral students. Topics discussed include the costs and benefits of adaptation and mitigation, discounting, uncertainty, equity, policy instruments, the second best, and international agreements. Key features: In-depth treatment of the economics of climate change Careful explanation of concepts and their application to climate policy Customizable integrated assessment model that illustrates all issues discussed Specific usage guidelines for each level of reader Companion website with data, quizzes, videos, and further reading Discussion of the latest developments in theory and policy Greater attention to policy and market imperfections than in the second edition. This book is an essential text for students in economics, climate change, and environmental policy, an excellent resource for researchers and practitioners, and a key text to support professors in their teaching.