This paper discusses the design of efficient environmental policies in general and reviews omissions and shortcomings of the presentation of the economic dimensions of climate change in the Intergovernmental Panel on Climate Change (IPCC) Working Group III's Report: "Climate Change 1995 Economic and Social Dimensions of Climate Change: Contribution of Working Group III to the Second Assessment Report of the Intergovernmental Panel on Climate Change" (Cambridge Univ. Press, Cambridge, UK, 1996). / Includes bibliographical references (p. 15-16). / Abstract in HTML and technical report in HTML and PDF available on the Massachusetts Institute of Technology Joint Program on the Science and Policy of Global Change website (http://mit.edu/globalchange/www/).