Haraden's model for estimating the economic cost of global warming is analysed. We change his method of discounting and some of his input parameters in a manner consistent with physical and economic theory as well as empirical data. We then find much higher costs than Haraden found. These costs are compared to the cost of reducing CO2 emissions and we find that deep cuts of the emissions of CO2 are preferable. A check of the sensitivity of our results with respect to some crucial parameter values does not alter that conclusion.