~computer scientist turned mathematician turned materials scientist, working in phase-field modelling

From what I’ve seen, 2-3% is the most generally-accepted discount rate range. I think governments often use 3%.

The second key number is the social cost of carbon, which is basically an estimate of the direct effects of carbon emissions on the economy, but also depends on the discount rate (higher discount rate means less effective future economic cost, and thus lower social cost of carbon).
http://www.skepticalscience.com/monckton-myth-11-carbon-pricing-costs-vs-benefits.html

I think Nordhaus tends to be quite conservative on both values. The first link above compares recent papers by economists Epstein and Nordhaus (and co-authors). Epstein’s social cost of carbon estimate was about 4 times higher than used in the Nordhaus paper ($7.36 vs. $30 per ton of CO2). Some have argued that even Epstein’s social cost of carbon estimate is far too low.
http://www.e3network.org/papers/Climate_Risks_and_Carbon_Prices_executive_summary+full_report+comments.pdf

U.S. government agencies generally estimate it at between $19 and $68 per ton of CO2, consistent with the Epstein estimate. $7 per ton of CO2 is certainly at the low end of plausible values. Depite being so conservative, Nordhaus argues for taking action to address climate change by putting a price on carbon emissions. That says a lot – there’s just no economic justifcation for failing to take action to reduce CO2 emissions.

Sorry, but people who say, “Well, it’s only a theory” typically don’t have a very firms grasp on what science is and how it works.

Therefore, having spent a long time thinking through why it is that so many people find it so hard to shake of their so-called “scepticism” regarding climate science, I have managed to reduce my answer to just 104 words. You will find these in the footnote to today’s post on my blog:
Climate science in a nut fragment

I would also recommend reading the discussion between me and a certain John Kosowski in the comments section; although you may have to skim over those by John – as he writes much but says very little (IMHO).

In turn, others have criticized Nordhaus for under-valuing the welfare of future generations.

Nathan yes I’ve heard that too, and that critique seems a bit unfair. I have a positive impression of Nordhaus’ intellectual integrity.

Instead, his argument is apparently that of “tactical spending alternatives”: when you have a certain amount of money to use, you may use it
1) to mitigate (i.e., prevent part of) climate change by spending it now, or
2) invest it productively, so you’ll have more resources to work with when the time comes to adapt to the change you didn’t prevent.

There is no valuing, even implied, of the welfare of future generations compared to today’s.

If course it is fair to say that questions come to mind to using this approach, like
1) not all impacts of climate change offer the alternatives of mitigation and adaptation; for some, the alternatives are mitigation and suffering. The more severe the projected climate change, the larger this part is likely to be. How does the monetary equivalence for “suffering” — a trivial example, the loss of coastal wetlands and their enjoyment as outdoor environment — behave as GDP goes up?
2) Prices will change within the economy when GDP goes up. E.g., “on-the-spot products” like houses will get relatively more expensive, being not as readily automatable/outsourcable. Many adaptation tools like levees, or the transfer of infrastructure to higher ground, or keeping desertifying regions viable for agriculture, are of this nature.

I’m certainly no economist, but I hope the real ones know what they are doing :-)

The chart shows the global temperature data since 1980 from HadCRU, which is a joint effort by the British Met Office’s Hadley Centre and the University of East Angli’s Climatic Research Unit–so it’s HadCRU, not FadCRU.

There are several other global temperature data sets I could have used. They all show very similar trends, but I showed HadCRU because that’s the one referenced by the Daily Mail article you linked to.

The red line is the monthly average temperature for each month from January 1980 to the most recently available, which is currently December, 2011. The green line is the least-squares linear trend for the same period. It shows that on average over that period, the temperature is increasing at about 1.5 degrees C per century.