The economics of the thermohaline circulation—A problem with multiple thresholds of unknown locations

A potentially serious environmental threat facing humanity is the possibility of a collapse of the thermohaline circulation. Resulting climate changes, including absolute cooling near Greenland and northwest Europe, could be abrupt. Collapse of the thermohaline circulation may be triggered if the temperature or the rate of temperature change exceeds certain thresholds. The locations of these thresholds are unknown. Economic regulation of this problem requires solution methods for a class of dynamic optimization problems with multiple thresholds located in n-dimensional space. This class of problems has hitherto not been discussed in the literature. We present a model for the economic regulation of CO₂ emissions in the presence of threshold-triggered risk of a collapsing thermohaline circulation and derive optimality conditions for regulation.     

Climate change impacts on irrigation water requirements: Effects of mitigation, 1990–2080

Potential changes in global and regional agricultural water demand for irrigation were investigated within a new socio-economic scenario, A2r, developed at the International Institute for Applied Systems Analysis (IIASA) with and without climate change, with and without mitigation of greenhouse gas emissions. Water deficits of crops were developed with the Food and Agriculture Organization (FAO)–IIASA Agro-ecological Zone model, based on daily water balances at 0.5° latitude × 0.5° longitude and then aggregated to regions and the globe. Future regional and global irrigation water requirements were computed as a function of both projected irrigated land and climate change and simulations were performed from 1990 to 2080. Future trends for extents of irrigated land, irrigation water use, and withdrawals were computed, with specific attention given to the implications of climate change mitigation. Renewable water-resource availability was estimated under current and future climate conditions. Results suggest that mitigation of climate change may have significant positive effects compared with unmitigated climate change. Specifically, mitigation reduced the impacts of climate change on agricultural water requirements by about 40%, or 125–160 billion m³ (Gm³) compared with unmitigated climate. Simple estimates of future changes in irrigation efficiency and water costs suggest that by 2080 mitigation may translate into annual cost reductions of about 10 billion US$.     

Popular Support for Climate Change Mitigation: Evidence from a General Population Mail Survey

Using a sample of 1,651 US households, we explore some determinants of willingness to pay (WTP) for climate change mitigation programs. Our mail survey had a relatively low response rate, so we first use several additional data sources to build a detailed sample selection model. This model uses features of the survey instrument, measures of geographic vulnerability to climate change, seasonality, the political mix in the county, attributes of the address or addressee, and a set of factor scores from an extensive factor analysis of all census tracts in the US. We estimate this model jointly with a model to explain climate policy preferences as a function of the domestic and international distribution of policy costs as well as the climate change impacts that each respondent believes will occur under a policy of business-as-usual. Despite statistically significant patterns of nonresponse, selectivity effects are minimal in this case. WTP for climate change mitigation is greater when the domestic incidence of mitigation costs is borne mostly through higher energy taxes. It is also greater when costs are understood to be shared internationally with other groups of countries, rather than being borne mostly by a country group including the US. People are generally more willing to pay for climate change mitigation if they believe that the harm caused by climate change impacts will be substantial, rather than just moderate. The assistance of former UCLA undergraduate students Ivka Adam, Tashi Ghale, Michelle Gogolewski, Vilija Gulbinas, and Lindy Olsson was essential to survey development and administration. This paper is based upon work supported in part by the National Science Foundation under Grant No. 9818875 to UCLA, with additional support from the Raymond F. Mikesell Foundation at the University of Oregon. Any opinions, findings, and conclusions or recommendations expressed in this paper are those of the authors and do not necessarily reflect the views of either the National Science Foundation or ICF International.     

Reducing climate change impacts on agriculture: Global and regional effects of mitigation, 2000–2080

What are the implications for agriculture of mitigating greenhouse gas emissions? By when and by how much are impacts reduced? Where does it matter most? We investigated these questions within the new A2 emission scenario, recently developed at the International Institute of Applied Systems Analysis with revised population and gross domestic product projections. Coupling an agro-ecological model to a global food trade model, two distinct sets of climate simulations were analyzed: 1) A non-mitigated scenario, with atmospheric CO₂ concentrations over 800 ppm by 2100; and 2) A mitigation scenario, with CO₂ concentrations stabilized at 550 ppm by 2100. Impacts of climate change on crop yield were evaluated for the period 1990–2080, then used as input for economic analyses. Key trends were computed over the 21st century for food demand, production and trade, focusing on potential monetary (aggregate value added) and human (risk of hunger) impacts. The results from this study suggested that mitigation could positively impact agriculture. With mitigation, global costs of climate change, though relatively small in absolute amounts, were reduced by 75–100%; and the number of additional people at risk of malnutrition was reduced by 80–95%. Significant geographic and temporal differences were found. Regional effects often diverged from global net results, with some regions worse off under mitigation compared to the unmitigated case.     

A general equilibrium assessment of climate change–induced loss of agricultural productivity in Nepal

The impact of climate change on agriculture has been one of the most discussed topics in the literature on climate change. Multi-regional computable general equilibrium (CGE) models have frequently been used to examine the impact of climate change on agriculture. However, these studies do not focus on country-specific issues related to the link between climate change and agriculture. This paper aims to address this gap by investigating the economy-wide impacts of climate change on Nepalese agriculture. Nepal makes an interesting case study as it has one of the most vulnerable agricultural economies in South Asia. This paper develops a comparative static multi-household CGE model to trace the direct and indirect impacts of climate change in Nepal. The results suggest that climate change has a significant negative impact on the overall Nepalese economy due to the induced loss of agricultural productivity. The results further reveal that rural households in Nepal, whose livelihoods primarily depend on subsistence farming, will face additional climate change–induced stresses due to already overstrained poverty and a weak social welfare system. The results indicate an urgent need to mainstream adaptation strategies to lessen the negative impacts of any climate change–induced loss of agricultural productivity in Nepal.     

Optimal Timing of Climate Change Policy: Interaction Between Carbon Taxes and Innovation Externalities

This paper addresses the impact of endogenous technology through research and development (R&D) on the timing of climate change policy. We develop a model with a stock pollutant (carbon dioxide) and abatement technological change through R&D, and we use the model to study the interaction between carbon taxes and innovation externalities. Our analysis shows that the timing of optimal emission reduction policy strongly depends on the set of policy instruments available. When climate-specific R&D targeting instruments are available, policy has to use these to step up early innovation. When these instruments are not available, policy has to steer innovation through creating demand for emission saving technologies. That is, carbon taxes should be high compared to the Pigouvian levels when the abatement industry is developing. Finally, we calibrate the model in order to explore the magnitude of the theoretical findings within the context of climate change policy.      

A new energy security paradigm for the twenty-first century

Conventional energy security has been focused on the depletion of natural resources, particularly oil, natural gas and coal. More recently, the link between energy security and the military has been made, focused on the defence of international oil tanker chokepoints and the free flow of oil through these trade routes. This paper considers a possible future in which, the impacts of climate change have been realized far earlier than most experts have previously expected. This has promoted a transition to cleaner energy technologies long before the depletion of fossil fuel resources. In this scenario, the peak in demand for fossil fuels occurs before the peak in supply and some nations are strongly promoting the development and deployment of clean energy technologies. Some private companies developing and deploying these technologies benefit from sudden market expansion, fuelled largely by the world's richest nations struggling to reduce their carbon footprint.In this scenario the countries of the world would fall into one of the three categories: (1) the countries willing and readily able to adjust in response to rapid and serious climate change, (2) the countries willing to adjust, but facing significant economic hardship without external assistance and protection, (3) and those countries unwilling and, perhaps to their perception at least, unable to play a part in combating climate change. In this scenario, the Western Economies will likely fall under the first category while the BRIC countries (Brazil, Russia, India, China) might fall into the second category. These nations together are needed to achieve a viable, powerful, and effective formal or informal “Clean Energy Alliance”. Some countries however will probably fall into the third category. This paper considers how countries in the first two categories could respond by adjusting their foreign, trade and even military policies.If climate change is as severe and as pressing as some fear, leadership will be needed from those nations who are most capable of responding to the crisis. Within a generation, the great powers might find themselves shifting from keeping trade routes open to constraining the same trade. Severe climate change impacts could even approach the timescale of technological innovation needed to respond to this crisis. This paper proposes that our world may need new military and foreign policy options as well as new energy technology options in the years to come. Parallels are drawn between the challenge of decarbonising the global energy systems in the early twenty-first century and the ethical imperative of ending slavery in the early nineteenth century.     

Exchanging Goods and Damages: The Role of Trade on the Distribution of Climate Change Costs

The impacts of climate change vary significantly across world regions. Whereas tropical and subtropical regions are expected to suffer severely from the effects of climate change, the impacts in northern latitudes should remain relatively moderate. However, regions are not self-sufficient, and the costs of climate change can spread across regions through international trade. I study the international spillover of climate impacts within a regionalised, climate-sensitive, dynamic computable general equilibrium model of the world economy. Using data from a global climate model shows that the world regions face welfare losses between 0.6 and 2.1 % due to climate change. I also show that climate change affects terms of trade and sectoral competitiveness. By means of a decomposition method, the extent of spillover impacts through international trade can be identified. Spillover impacts significantly affect, either positively or negatively, the total costs of climate change for a region. For regions with low exposure to climate change and high adaptive capacities, spillover effects are responsible for a 1/6 of the total cost of climate change.     

The damage costs of climate change toward more comprehensive calculations

It is argued that estimating the damage costs of a certain benchmark climate change is not sufficient. What is needed are cost functions and confidence intervals. Although these are contained in the integrated models and their technical manuals, this paper brings them into the open in order to stimulate discussion. After briefly reviewing the benchmark climate change damage costs, region-specific cost functions are presented which distinguish tangible from intangible losses and the losses due to a changing climate from those due to a changed climate. Furthermore, cost functions are assumed to be quadratic, as an approximation of the unknown but presumably convex functions. Results from the damage module of the integrated climate economy modelFUND are presented. Next, uncertainties are incorporated and expected damages are calculated. It is shown that because of convex loss functions and right-skewed uncertainties, the risk premium is substantial, calling for more action than analysis based on best-guess estimates. The final section explores some needs for further scientific research.     

The Impact of Climate Change on the Balanced Growth Equivalent: An Application of <Emphasis Type="Italic">FUND</Emphasis>

The Stern Review added balanced growth equivalents (BGE) to the economic climate change research agenda. We first propose rigorous definitions of the BGE for multiple regions and under uncertainty. We show that the change in the BGE is independent of the assumed scenario of per capita income. For comparable welfare economic assumptions as the Stern Review, we calculate lower changes in BGE between a business as usual scenario and one without climate impacts with the model FUND than the Stern Review found with the model PAGE. We find that mitigation policies give even lower changes in BGE and argue that those policy choices should be the focus of the research effort rather than total damage estimates. According to our results, the current carbon tax should be below $55/tC. Sensitivity analyses show that the Stern Review chose parameters that imply high impact estimates. However, for regionally disaggregated welfare functions, we find changes in BGE that are significantly higher than the results from the Stern Review both for total damage as for policy analysis. With regional disaggregation and high risk aversion, we observe fat tails and with that very high welfare losses.      

Getting the Resilience Right: Climate Change and Development Policy in the ‘African Age’

ABSTRACT

Founded on a call to place climate change adaptation and climate risk management at the heart of contemporary development practice, the World Bank’s Africa Climate Business Plan presents an ambitious agenda for coordinating $19bn of loans, grants and investment over the coming decade. The centrepiece of this recasting of development thinking is the notion of resilience, which ties together the various activities proposed under the Plan. Resilience must respectively be strengthened, empowered and enabled in order for African countries to withstand climate change impacts. In this paper we subject this new climate-resilient development discourse to critical scrutiny. Using the theoretical lens of post-politics, we caution how the ill-defined category of resilience is deployed to reinforce a profoundly depoliticising agenda in which climate change is posited as an external threat to an otherwise seamless narrative of African advancement. In so doing, we illustrate how the Bank obscures the contested histories of African development and uses the discourse of climate-resilient development to perpetuate its neoliberal agenda within the continent.     

Climate change,health care access and regional influence on components of U.S. agricultural productivity

This article examines factors driving three components of total factor productivity change (TFPC) in U.S. agriculture – technical change (TC), technical efficiency change (TEC), and scale and mix efficiency change (SMEC). We also examine TFPC and contrast implications derived from the component models with those from a directly estimated TFPC model. Our results show that TC and SMEC are both significantly impacted by innovation through public research and improved human capital through education and health care access. TEC and SMEC are significantly affected by farm size, and the latter is significantly affected by public policy. The ratio of family-to-total labour, terms of trade and precipitation have significant impacts on all three components, but extension has no significant impact on any component. Climate change variables are the most impactful factors on each component as well as on TFPC. While the impact of climate change is heterogeneous across regions and components, its estimated historical impact is most often positive. Nearly all TFPC elasticities estimated directly are qualitatively the same as those calculated from the component models and quantitatively similar.     

Depletion,climate, and the incremental value of groundwater

Groundwater provides vital inputs to crop production and contributes to rural economies throughout the world. Research on the economic benefits associated with groundwater resources has typically focused on the impacts of groundwater availability on the profitability of agricultural production or on the non-market benefits associated with groundwater quality for human consumption. In this research, we use stated-preference methods to investigate the total economic value to agricultural producers of an increase in groundwater availability in the Ogallala Aquifer region. The contingent valuation method allows for estimation of values beyond agricultural profitability, including non-market values such as the ability to leave additional groundwater to future generations. We find a median willingness to pay (WTP) for an additional 100 gallons per minute of well capacity of $77 per well, and that this estimate depends strongly on current well capacity and climate conditions. For counties in hotter and drier regions of the aquifer with low well capacity, median WTP is significantly higher. These results are then used in conjunction with projections of future climate and groundwater availability to generate predicted changes in the WTP for additional groundwater across the aquifer. This research provides important feedback on how the benefits of additional groundwater availability are predicted to change as groundwater resources are diminished in a changing climate.     

Global Warming and a Potential Tipping Point in the Atlantic Thermohaline Circulation: The Role of Risk Aversion

The risk of catastrophes is one of the greatest threats of climate change. Yet, conventional assumptions shared by many integrated assessment models such as DICE lead to the counterintuitive result that higher concern about climate change risks does not lead to stronger near-term abatement efforts. This paper examines whether this result still holds in a refined DICE model that employs the Epstein–Zin utility specification and that is fully coupled with a dynamic tipping point model describing the evolution of the Atlantic thermohaline circulation (THC). Risk is captured by the possibility of a future collapse of the circulation and it is nourished by fat-tailed uncertainty about climate sensitivity. This uncertainty is assumed to resolve in the middle of the second half of this century and the near-term abatement efforts, which are undertaken before that point of time, can be adjusted afterwards. These modelling choices allow posing the question of whether aversion to this specific tipping point risk has a significant effect on near-term policy efforts. The simulations, however, provide evidence that it has little effect. For the more likely climate sensitivity values, a collapse of the circulation would occur in the more distant future. In this case, acting after learning can prevent the catastrophe, implying the remarkable insensitivity of the near-term policy to risk aversion. For the rather unlikely and high climate sensitivity values, the expected damage costs are not great enough to justify taking very costly measures to safeguard the THC. Our simulations also provide some indication that risk aversion might have some effect on near-term policy, if inertia limiting the speed of decarbonisation is accounted for. As it is highly uncertain how restrictive this kind of inertia will be, future research might investigate the effects of risk aversion if additional uncertainty about inertia is considered.     

Responding to climate and other change processes in complex contexts:: Challenges facing development of adaptive policy frameworks in the Ganga Basin

The Ganga Basin, one of the world's most densely populated and vulnerable regions, is also among the world's most dynamic hydrological systems. Rivers exiting the Himalaya deposit massive amounts of sediment in the plains and shift their courses regularly. The natural dynamics of this system have a direct impact on populations. On August 18th, 2008, for example, embankments on the Kosi River (a tributary to the Ganges), failed and the channel shifted by as much as 120 km (Sinha, 2008 [1]) displacing over sixty thousand people in Nepal and three and a half million in India. Transport and power systems disrupted across large areas. The embankment failure was not caused by an extreme event. Instead the breach represented a failure of interlinked physical and institutional infrastructure systems in an area characterized by complex social, political, and environmental relationships.Projected climate changes in the Ganga Basin are likely to greatly exacerbate vulnerability (Adaptation Study Team, 2008 [2]). While the Kosi breach had nothing to do with climate change, such events will increase if climatic variability, sediment transport, and extreme events increase. Understanding how populations can respond to the dynamic nature of rivers such as the Kosi is, as a result, essential to develop strategies for adapting to climatic change. Understanding is also essential at the policy level for building adaptive capacity. The challenge is to identify policy frameworks and their relationship to interlinked physical and institutional infrastructure combinations that create environments enabling adaptation within households, communities, and regions.This paper explores the challenges and opportunities facing the development of adaptive policy frameworks in the Ganga Basin. The characteristics of frameworks that are adaptive in themselves and enable adaptation along with their relationship to different types of interlinked institutional and infrastructure systems are explored first. Following this, the case of the Kosi embankment along with the projected impacts of climate change across the Ganga Basin is used to identify the key challenges and opportunities that are common in many regions. The paper concludes with specific observations on the development of adaptive policy frameworks for responding to climate change in complex developing country contexts.     

A Ricardian Analysis of the Distribution of Climate Change Impacts on Agriculture across Agro-Ecological Zones in Africa

This paper examines the distribution of climate change impacts across the sixteen Agro-Ecological Zones (AEZs) of Africa. We combine net revenue from livestock and crops and regress total net revenue on a set of climate, soil, and socio-economic variables with and without country fixed effects. Although African crop net revenue is very sensitive to climate change, combined livestock and crop net revenue is more climate resilient. With the hot and dry CCC climate scenario, average damage estimates reach 27% by 2100, but with the mild and wet PCM scenario, African farmers will benefit. The analysis of AEZs implies that the effects of climate change will be quite different across Africa. For example, currently productive areas such as dry/moist savannah are more vulnerable to climate change while currently less productive agricultural zones such as humid forest or sub-humid AEZs become more productive in the future. S. Niggol Seo is the Consultant to the World Bank.     

Probabilistic temperature change projections and energy system implications of greenhouse gas emission scenarios

This paper explores the implications for global average temperature change of a set of reference and mitigation scenarios in a probabilistic framework. First, we use published probability density functions for climate sensitivity to investigate the likelihood of achieving targets expressed as levels or rates of global average temperature change. We find, for example, that limiting warming to 3 C above pre-industrial levels with at least a medium likelihood requires cumulative emissions reductions on the order of 30-60% below one unmitigated reference scenario by 2100, while a more favorable baseline scenario requires no reductions at all to achieve this outcome with the same likelihood. We further conclude that the rate of temperature change may prove to be more difficult to control, especially if most of the mitigation effort is postponed until later in the century. Rate of change targets of 0.1–0.2 °C/decade are unlikely to be achieved by a target for the long-term level of climate change alone. Second, we quantify relationships between mitigation costs and the likelihood of achieving various targets and show how this depends strongly on the reference scenario. Third, we explore relationships between medium-term achievements and long-term climate change outcomes. Our results suggest that atmospheric concentrations and the share of zero-carbon energy in the middle of the 21st century are key indicators of the likelihood of meeting long-term climate change goals cost-effectively. They also suggest that interim targets could be an effective means of keeping long-term target options open. Our analysis shows that least-cost mitigation strategies for reaching low climate change targets include a wide portfolio of reduction measures. In particular, fundamental long-term structural changes in the energy system in these scenarios are a necessary but not sufficient condition to achieve high likelihoods for low temperature targets. The cost-effective portfolio of emissions reductions must also address demand-side measures and include mitigation options in the industry, agriculture, and the forest sector.     

气候变化对干旱区居民生计脆弱性影响研究——基于新疆和宁夏两省区的农户调查

气候变化是导致干旱区居民生计脆弱性的重要原因之一。构建生计脆弱性指标(Livelihood Vulnerability Index,LVI-IPCC)可以评估气候变化对干旱地区居民生计的影响。根据IPCC定义气候变化脆弱性的三个特征,选择新疆、宁夏两个典型干旱省份,调查社会人口指标、生计情况、社会关系网络、健康、食品、饮水安全、自然灾害和气候变化等数据,用复合指标和脆弱性指标进行对比分析。结果表明,宁夏在水资源、健康等方面的脆弱性更为明显,而新疆在社会关系、自然灾害和气候变化等方面更为脆弱。这种实证方法可用于被监测脆弱性,在缺乏地区性数据时检验某种政策的有效性。     

Identifying and evaluating robust adaptive policy responses to climate change for water management agencies in the American west

Climate change presents a significant planning challenge for water management agencies in the western United States. Changing precipitation and temperature patterns will disrupt their supply and extensive distribution systems over the coming decades, but the precise timing and extent of these impacts remain deeply uncertain, complicating decisions on needed investments in infrastructure and other system improvements. Adaptive strategies represent an obvious solution in principle, but are often difficult to develop and implement in practice. This paper describes work helping the Inland Empire Utilities Agency (IEUA) explicitly develop adaptive policies to respond to climate change and integrating these policies into the organizations' long-range planning processes. The analysis employs Robust Decision Making (RDM), a quantitative decision- analytic approach for supporting decisions under conditions of deep uncertainty. RDM studies use simulation models to assess the performance of agency plans over thousands of plausible futures, use statistical “scenario discovery” algorithms to concisely summarize those futures where the plans fail to perform adequately, and use these resulting scenarios to help decisionmakers understand the vulnerabilities of their plans and assess the options for ameliorating these vulnerabilities. This paper demonstrates the particular value of RDM in helping decisionmakers to design and evaluate adaptive strategies. For IEUA, the RDM analysis suggests the agency's current plan could perform poorly and lead to high shortage and water provisioning costs under conditions of: (1) large declines in precipitation, (2) larger-than-expected impacts of climate change on the availability of imported supplies, and (3) reductions in percolation of precipitation into the region's groundwater basin. Including adaptivity in the current plan eliminates 72% of the high-cost outcomes. Accelerating efforts in expanding the size of one of the agency's groundwater banking programs and implementing its recycling program, while monitoring the region's supply and demand balance and making additional investments in efficiency and storm-water capture if shortages are projected provides one promising robust adaptive strategy — it eliminates more than 80% of the initially-identified high-cost outcomes.     

International climate regimes: Effects of delayed participation

This paper analyses how delayed participation by regions can affect international climate regimes in terms of the feasibility, costs, timing, magnitude and nature of the long-term mitigation response. We use the energy-systems optimization model MESSAGE to construct several climate change mitigation scenarios with various levels of regional participation in short-to-mid term. By comparing these with a global scenario that assumes full spatial and temporal flexibility throughout the century, we are able to evaluate how participatory decisions affect the mitigation response as well as the costs and technology choices. We find that short-term postponement of participation from some regions can often lead to a delay of mitigation measures on the global level. However, if the regional delay lasts until mid-century, participants of the regime are likely to increase their efforts in the short term. Mitigation costs are found to substantially increase as a result of delayed participation—the extent of the increase depends on the relative importance of the region that postpones its participation, the stringency of the climate target and the ability to reorganize mitigation measures. Our analysis also shows that a region's decision to delay its participation in an international climate regime can lead to accumulated inertia in its energy system and thus to a delayed ‘technological transition’ toward a low-carbon future.