Greenhouse gases, including co2, methane, and N2o, are considered to be partly responsible for climate change. Although there are a variety of sources, combustion of fossil fuels and deforestation are the main causes of increased levels of greenhouse gases in the atmosphere. Scientists anticipate that in the future, the impact of climate change will be felt much more seriously. Changes in precipitation patterns, glacier melting, droughts, increased flooding, greater storm intensity, decreased agricultural yield, species extinction, and spread of infectious disease are among the anticipated consequences. Naturally, these impacts will have substantial economic and social consequences. Stavins [2011] reviewed the current literature about climate change and economic policy instruments that could help tackle the issue. He reported that due to economic and technological uncertainties and different opinions methodo logical issues, estimates of the economic impact of unrestrained climate change vary greatly. However, he claimed a sensible estimate was an impact of 1 to 3 percent world GDP per year by the middle of the century. In order to mitigate these effects, cutting the 2005 global emission level by between 60 and 80 percent is necessary [Metz et al., 2007]