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5 Climate Change
Pages 248-308

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From page 248...
... Given its resource constraints, it was not feasible for the committee to conduct a detailed critical review of the IAMs. Estimates of the damages associated with GHG emissions in IAMs rest on estimates of the physical and monetary impacts of temperature changes in various market and nonmarket sectors.
From page 249...
... Climate-Change Observations, Drivers, and Future Projections According to the Intergovernmental Panel on Climate Change (IPCC) , scientists have documented that Earth's climate system is warming, the last decade was the warmest on record, global average temperatures have increased about 1.3°F since 1990, and sea levels at the end of the 20th century were rising almost twice as fast as over the century as a whole (IPCC 2007a,b)
From page 250...
... B1 predicts a less dramatic increase in global average temperatures. Since 2000, industrial carbon emissions have increased more rapidly than in any of the scenarios (Raupach et al.
From page 251...
... share of different anthropogenic GHGs in total emissions in 2004 in terms of CO2-equivalent; and (c) share of different sectors in total anthropogenic GHG emissions in terms of CO2-equivalent (forestry includes deforestation.)
From page 252...
... Left panel: Solid lines are multimodel global averages of surface warming (relative to 1980-1999) in the IPCC Special Report on Emission Scenarios (SRES)
From page 253...
... Overview of Quantification Methods, Key Uncertainties, and Sensitivities Defining the Marginal Damage of GHG Emissions The combustion of fossil fuels is a major source of GHG emissions, which create externalities through their impact on the stock of GHGs in the atmosphere and the subsequent effects of GHG concentrations on climate. Evaluating the external costs of energy due to climate change is a daunting task.
From page 254...
... and do not include contributions from melting ice sheets, glaciers, and ice caps. Long-term thermal expansion is projected to result in 0.2 to 0.6 m per degree Celsius of global average warming above preindustrial levels.
From page 255...
... . The right-hand panel shows ranges of global average temperature change above preindustrial levels, using (i)
From page 256...
... Effect c is captured by the term ΔID, which captures the monetary damages associated with changes in agricultural yields or loss of species diversity. Attempts to measure these damages are reviewed briefly later in this section.
From page 257...
... , δt = discount factor from year t to 0 = (1 + r) –t, where r is the discount rate, and t f = final year for which climate damages are included.
From page 258...
... Marginal damages are extremely sensitive to the choice of discount rate, given the fact that the climate impacts of a ton of CO2-eq emissions will be felt for centuries (tf is typically 100 to 300 years)
From page 259...
... The next section provides an overview of how the damages associated with various temperature changes are modeled in three prominent IAMs. Approach to Measuring Marginal Damages in Integrated Assessment Models IAMs combine simplified global climate models with economic models in an effort to estimate the economic impacts of climate change and to identify emission paths that balance these economic impacts against the costs of reducing GHG emissions.
From page 260...
... FUND differs from RICE and DICE in that the base year impacts in agriculture and ecosystems depend not only on the magnitude of temperature change but also on the rate of temperature change. It is also the case in FUND that the effect of a change in mean global temperature on marginal damages varies by sector   OECD-America, OECD-Europe, OECD-Pacific, Central and Eastern Europe and the former Soviet Union, the Middle East, Latin America, South and Southeast Asia, Centrally Planned Asia, and Africa.
From page 261...
... . Global climate models predict an increase in the frequency of heat waves, heavy precipitation events, and the intensity of tropical cyclones (IPCC 2007b)
From page 262...
... for the period 2090-2099, relative to 1980-1999. Values are multimodel averages based on the IPCC Special Report on Emission Scenarios (SRES)
From page 263...
... • Annual runoff is increasing in higher latitudes and decreasing in some parts of West Africa, southern Europe, and southern Latin America. • Peak spring river flows are occurring earlier in areas with a seasonal snow pack.
From page 264...
... . However, there is scientific consensus that over many centuries thermal expansion of the ocean due to global warming is very likely to cause much larger rises in sea levels than those observed over the 20th century.
From page 265...
... Erosion and sediment transport No evidence for climate-related trend (WGII AR4, Chapter 3, Section 3.2) Irrigation water demand No evidence for climate-related trend (WGII AR4, Chapter 3, Section 3.2)
From page 266...
... Although the contributions to sea-level rise made by thermal expansion and melting glaciers are well understood, uncertainty remains about the magnitude of the ice sheets' effects, so much so that their impact was left unquantified in the most recent IPCC report. On the basis of several recent studies on sea-level rise, Karl et al.
From page 267...
... The rest of this section systematically explores the impacts of climate change on a variety of aspects of human life, including water resources; ecosystem services; food production and forest products; sea-level rise and coastal populations; and human health, industry, society, and security. Water Availability A critical challenge facing the growing world population is access to water, which could be significantly affected by climate change.
From page 268...
... dIn all scenarios, the projected global average sea level at 2100 is higher than it is in the reference period. The effect of changes in regional weather systems on sea level extremes has not been assessed (WGI 10.6)
From page 269...
... and poor socially isolated Adverse effects on Increased risk of deaths, Disruption of settlements, quality of surface injuries and infectious, commerce, transport, and societies and groundwater; respiratory and skin diseases due to flooding; pressures on contamination of water urban and rural infrastructures; supply; water scarcity loss of property may be relieved More widespread water Increased risk of food and Water shortage for settlements, stress water shortage; increased industry, and societies; reduced risk of malnutrition; hydropower-generation potentials; increased risk of water- and potential for population migration food-borne diseases Power outages causing Increased risk of deaths, Disruption by flood and high disruption of public injuries, water- and food- winds; withdrawal of risk coverage water supply borne diseases; post- in vulnerable areas by private traumatic stress disorders insurers; potential for population migrations; loss of property Decreased freshwater Increased risk of deaths Costs of coastal protection versus availability due to and injuries by drowning costs of land-use relocation; saltwater intrusion in floods; migration-related potential for movement of health effects populations and infrastructure ABBREVIATION: SRES = Special Report on Emission Scenarios. SOURCE: IPCC 2007d, p.18, Table SPM.1.
From page 270...
... The range of estimates for the United R01631when taking into account the States and for the world is great, especially different assumptionsall type is outline and therefore uneditable vector, but about global warming. This range speaks to the difficulties in making sharp impact predictions.
From page 271...
... , T = global mean temperature, α = benchmarking parameter, τ = parameter measuring technological progress in water supply and demand (ranges from 0 to .01 with a preferred estimate of .005, β = elasticity of impact with respect to income growth (ranging from .7 to 1 with a preferred estimate of .85) , γ = elasticity of impact with respect to temperature change (ranging from .5 to 1.5 with a preferred estimate of 1)
From page 272...
... Depending on the increase in sea level, the adaptation options confronting human populations in the coastal zone are to protect the shore, relocate inland, or do a combination of both, each of which is associated with forgone income and well-being -- that is, damage. How much of each option to be chosen is essentially an economic decision, which is simulated within IAMs in the process of arriving at aggregate estimates of climate damages.
From page 273...
... R01631 There is a sizeable literature on the damages associated with sealevel rise. The differences in model results stem from different ways of uneditable bitmapped image representing the processes by which damages arise, including the level of detail in climate- and physical-impact modeling and the choice between a "process-based" and "reduced-form" approaches to representing impacts.
From page 274...
... Both authors develop damage estimates on a regional basis by extrapolating from studies of the United States and other countries, but to implement the process-based approach requires many more assumptions about the detailed impacts of sea-level rise and the character of affected individuals' adaptation responses. Damages in the RICE model are constructed by developing a benchmark estimate of the cost of the sea level increase arising from 2°C warming in the United States (0.1% of GDP)
From page 275...
... Other studies based on ecosystem services often start from the proposition that ecosystem services are critical for the maintenance of healthy people, communities, and people. As a consequence, they tend to assign large but rarely quantified amounts to the external impacts of   Displaced persons in countries of the OCED, Central and Eastern Europe, and the former Soviet Union stay entirely within their own regions, and only 10% displaced persons in poorer regions emigrate from their own regions.
From page 276...
... The general inclination of stakeholders who take this position to assign zero or even negative discount rates creates the foundation for extraordinarily large damages. The steps to quantitatively test or reconcile these perspectives will probably be numerous and challenging.
From page 277...
... . Approaches based on the valuation of ecosystem services typically calculate the cost of replacing natural services with human or industrial alternatives.
From page 278...
... The approaches based on valuing ecosystem services are not yet integrated in any of the main IAMs. Realizing such integration would represent an important conceptual advance in the credibility of the modeling, but it might not yield dramatic improvements in model accuracy or utility.
From page 279...
... . To estimate the GDP impacts of a particular climate scenario -- for example, an increase in mean global temperature of 2.5°C in the year 2100 -- researchers must predict the impact of a temperature change on agricultural revenues in the year 2100 as well as the share of agriculture in GDP in 2100.
From page 280...
... . The Ricardian approach looks at variation in land values or net revenues across different geographic areas that vary in climate.
From page 281...
... . Further temperature increases quickly become very harmful.
From page 282...
... Negative values indicate percentage decreases in productivity. For example, the agricultural productivity in Mexico and the southwestern United States is predicted to decline by 25% or more.
From page 283...
... These impacts are typically derived by looking at patterns of mortality either by day or season as a function of temperature for major cities and then using regression techniques to estimate temperature associated effects. Investigators differ in choice of daily changes -- for example, heat waves, or average seasonal temperatures, the former providing higher estimates but with excess deaths typically limited to more vulnerable subpopulations.
From page 284...
... All the categories listed above affect different populations differentially, depending on such features as age, underlying health status, and stage of socioeconomic development. For example, the sanitation-related disorders are relevant only in the context of under-development; populations in advanced countries rarely suffer from these impacts under any climate conditions except in a hurricane Katrina-like disaster.
From page 285...
... meta-analysis of data from 17 European and American countries (20 cities) -- a model based on seasonal averages -- to calculate the impact of temperature under several climate scenarios.
From page 286...
... Others studies have found similar impacts, although regional variation is potentially significant. Global impacts mirror regional impacts in the United States.
From page 287...
... The island at its highest point is only a few feet above sea level (CNA 2007, p.
From page 288...
... Tol (2009) reported that globally the increased costs of electricity for cooling are the single largest component of the marginal damages from a ton of CO2-eq emissions, while global reductions in heating costs reduce the marginal damages from a ton of CO2-eq emissions.
From page 289...
... One concern about such climate changes is the potential for them to trigger serious or catastrophic follow-on impacts, such as the release of methane and CO2 trapped in ocean sediments and permafrost; loss of biodiversity through extinction, disruption of species' ecological interactions, and major changes in ecosystem structure; and disturbance regimes, such as wildfire and insects. Another reflection of this concern is the tendency of these sorts of changes to be discussed in parallel with potential downstream consequences for human society, in particular the value of lost species, ecosystem services, arable land and attendant effects on food security, as well as adverse effects on human settlements, migration, and the potential human insecurity (i.e., refugees, violent conflict)
From page 290...
... Their estimate of the irreversible temperature increase ranges from 1 to 4°C, with a corresponding 0.2-0.6 m sea-level rise per degree of global warming, for an irreversible global average sea-level rise of at least 0.4-1.0 m (and as much as 1.9 m for peak CO2 concentrations in excess of 1,000 ppmv [parts per million by volume]
From page 291...
... Figure 5-8 color R01631 uneditable bitmapped image scaled for portrait above, landscape below 291 FIGURE 5-8  Irreversible precipitation changes by region. SOURCE: Solomon et al.
From page 292...
... , who estimated that THC shutdown increases the marginal damage of GHG emissions by $0.1-2.2 per ton of carbon. The seemingly small magnitude of these figures may be appreciated when one considers that, in the Link and Tol study, THC collapse has a negligible influence on global average surface temperature but has a substantial impact on temperatures in the United States, Canada, and western Europe, inducing cooling of 0.5-1.5°C by 2150 and 1-3°C by 2300.
From page 293...
... The discussion above describes the possibility of extreme climate changes that could result in large, irreversible economic damages to the planet. As noted at the beginning of the chapter, the possibility of extreme events is not handled well by IAMs in calculating the marginal damages of CO2.
From page 294...
... Tol (2008) identified 13 published studies that have estimated the monetized impacts of climate change at a global level; several of them also include total climate-change damage estimates individually for the United States and other regions (Fankhauser 1995a; Tol 1995, 2002b; Nordhaus 1994a,b, 2006; Nordhaus and Yang 1996; Plambeck and Hope 1996; Mendlesohn et al.
From page 295...
... include only market impacts, while the other studies also include estimates of nonmarket impacts, at least to some degree.15 Table 5-7 shows that these studies typically estimate the aggregate global market plus nonmarket impact of doubling GHG concentrations at 1-2% of lost world GDP. The aggregate impacts mask significant differences in regional impacts and in the underlying impacts for individual damage 15  Maddison (2003)
From page 296...
... and Tol (2002b) assessments of a 4°C and 1°C temperature increase, respectively, all the other studies in Table 5-8 focus on a benchmark warming scenario of 2.5-3.0°C, corresponding to best estimates of eventual temperature change from a doubling of GHG concentrations.
From page 297...
... bFor PAGE model, mean global GDP impacts are given in Dietz et al.
From page 298...
... referenced plausible projections of GHG concentrations that go near to and beyond 1,000 ppm by 2100, with an associated best estimate global mean temperature increase above preindustrial levels of about 5-6°C and a likely range from just under 4°C to over 8°C. However, little is known about the precise shape of the temperature-damage relationship at such high temperatures.17 Figure 5-10 illustrates the dependence of GHG damage, as a percentage of global GDP, on the amount of temperature change.
From page 299...
... (b) Damage estimates, as a percentage of global GDP per capita, are correlated with increases in global mean temperature.
From page 300...
... As alluded to above, in addition to the benchmark estimate of total damages, important other assumptions include the change in damages with increased warming and with growth and changes in the composition of economic activity over time, the assumed emissions scenario, the climate sensitivity to GHG concentrations, the rate used to discount future impacts to the present, the timeframe over which impacts are considered, and the treatment of uncertainty and risk aversion. Box 5-2 discusses approaches used to determine a discount rate.
From page 301...
... To provide a more consistent comparison of marginal-damage estimates, it is helpful to focus on estimates using the most widely used impact assessment models, DICE, FUND, and PAGE, as shown in Table 5-9. The estimates represent the marginal damages from current emissions against an assumed reference case climate scenario without GHG mitigation.
From page 302...
... The present value of a stream of effects occurring at various times in the future is calculated by summing the discounted monetary values of the effects. In determining the appropriate discount rate to use for aggregating effects on the current and some future generation, one can distinguish between descriptive and prescriptive ap TABLE 5-9  Indicative Marginal Global Damages from Current GHG Emissions ($/Ton CO2-eq)
From page 303...
... , which yield marginal damage estimates of $6 and $102 per ton, respectively: a 17-fold difference. Both studies used the same version of the PAGE model, so the only significant difference in assumptions is the discount rate.
From page 304...
... . The marginal damages from current emissions do not decrease appreciably for alternative scenarios with significantly lower GHG emissions and temperature increases in Nordhaus (2008)
From page 305...
... One implication is that even low discount rate scenarios that give rise to high marginal damages with no climate mitigation may be consistent with substantially lower marginal-damage estimates (and corresponding Pigouvian emission prices) if, in fact, controls are undertaken.
From page 306...
... As with any social analysis involving significant distributional impacts, it is therefore 20  To gain a rough sense for how marginal damages change as a function of growth and discounting, it is useful to consider the relative magnitude of the present value of a growing stream of damages discounted at different rates. As mentioned above, a typical climate economic model might imply marginal damages growing over time at about 2% per year due to economic growth and a convex damage function.
From page 307...
... crucial for decision makers not only to look at singular summary statistics (such as present value marginal damages) but also to understand the magnitude of impacts as individuals will bear them, both across time and at different points in time across regions.
From page 308...
... . • Marginal damages of GHG emissions may be highly sensitive to the possibility of catastrophic events.


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