Climate change,intergenerational equity and international law: An introductory note

The change in the Earth's climate caused by the accumulation of greenhouse gases in the atmosphere may be the most important environmental legacy that we leave to our descendants.Global change raises difficult issues of equity between our generation and future generations, and between different communities within future generations. International law is accustomed to addressing the effects of intentional environmental change on people who are already alive. It needs to be augmented by principles of intergenerational equity. We have certain obligations to future generations to pass on a planet in no worse condition than we received it and to give them equitable access to its resources.This requires a global strategy for climate change which will prevent excessively rapid climate change, prevent or mitigate the damage caused by climate change, and help countries to adapt to climate change. We need to avoid imposing major costs on future generations for our own benefit.To implement this strategy will require enforceable norms of behavior, which should be embodied in a Declaration of Planetary Rights and Obligations to Future Generations, and implemented in appropriate treaties and national and local legislation. Agreements should be drafted in such a way that they can incorporate increases in scientific understanding, for example by the creation of scientific advisory committees.     

A missed opportunity: The Stern Review on climate change fails to tackle the issue of non-substitutable loss of natural capital

The Stern Review on The Economics of Climate Change is one of the few cost-benefit analyses of climate change to come out in favour of immediate and decisive action to reduce greenhouse gas emissions. The choice of a low discount rate is the main reason for the Review's divergence in conclusions compared to other economic studies. I argue that the Review's ethical reasons for a low discount rate are defendable, but unlikely to find wider public support. In order to justify spending a large amount of scarce resources for the purpose of limiting climate change, it is necessary to move beyond the discounting debate. Unfortunately, the Review did not develop a persuasive argument for why climate change threatens to inflict upon future generations irreversible and non-substitutable damage to and loss of natural capital. This represents a missed opportunity as it would have provided a much more compelling case for drastic action than the Review's arguments for a low discount rate.     

Accounting for uncertainties and time preference in economic analysis of tackling climate change through forestry and selected policy implications for Scotland and Ukraine

The paper discusses the development of economic techniques for dealing with uncertainties in economic analysis of planting trees to mitigate climatic change. In consideration of uncertainty, time preference and intergenerational equity, the traditional cost-benefit analysis framework is challenged with regard to the discounting/non-discounting of carbon uptake benefits, and because it usually uses a constant and positive discount rate. We investigate the influence of various discounting protocols on the outputs of economic analysis. The idea of using the declining discount rate is also considered. Several numerical examples dealing with the analysis of afforestation for carbon sequestration in Scotland and Ukraine are provided. We show that the choice of discounting protocols have a considerable influence on the results of economic analysis, and therefore, on the decision-making processes related to climate change mitigation strategies. The paper concludes with some innovative insights on accounting for uncertainties and time preference in tackling climate change through forestry, several climate policy implications of dealing with uncertainties, and a brief discussion of what the use of different discounting protocols might imply for decision making.     

The economics (or lack thereof) of aerosol geoengineering

Anthropogenic greenhouse gas emissions are changing the Earth’s climate and impose substantial risks for current and future generations. What are scientifically sound, economically viable, and ethically defendable strategies to manage these climate risks? Ratified international agreements call for a reduction of greenhouse gas emissions to avoid dangerous anthropogenic interference with the climate system. Recent proposals, however, call for a different approach: to geoengineer climate by injecting aerosol precursors into the stratosphere. Published economic studies typically neglect the risks of aerosol geoengineering due to (i) the potential for a failure to sustain the aerosol forcing and (ii) the negative impacts associated with the aerosol forcing. Here we use a simple integrated assessment model of climate change to analyze potential economic impacts of aerosol geoengineering strategies over a wide range of uncertain parameters such as climate sensitivity, the economic damages due to climate change, and the economic damages due to aerosol geoengineering forcing. The simplicity of the model provides the advantages of parsimony and transparency, but it also imposes severe caveats on the interpretation of the results. For example, the analysis is based on a globally aggregated model and is hence silent on intragenerational distribution of costs and benefits. In addition, the analysis neglects the effects of learning and has a very simplistic representation of climate change impacts. Our analysis suggests three main conclusions. First, substituting aerosol geoengineering for CO₂ abatement can be an economically ineffective strategy. One key to this finding is that a failure to sustain the aerosol forcing can lead to sizeable and abrupt climatic changes. The monetary damages due to such a discontinuous aerosol geoengineering can dominate the cost-benefit analysis because the monetary damages of climate change are expected to increase with the rate of change. Second, the relative contribution of aerosol geoengineering to an economically optimal portfolio hinges critically on, thus far, deeply uncertain estimates of the damages due to aerosol forcing. Even if we assume that aerosol forcing could be deployed continuously, the aerosol geoengineering does not considerably displace CO₂ abatement in the simple economic optimal growth model until the damages due to the aerosol forcing are rather low. Third, substituting aerosol geoengineering for greenhouse gas emission abatement can fail an ethical test regarding intergenerational justice. Substituting aerosol geoengineering for greenhouse gas emissions abatements constitutes a conscious risk transfer to future generations, in violation of principles of intergenerational justice which demands that present generations should not create benefits for themselves in exchange for burdens on future generations.     

Personalized risk messaging can reduce climate concerns

One potential barrier to climate policy action is that individuals view climate change as a problem for people in other parts of the world or for future generations. As some scholars argue, risk messaging strategies that make climate change personally relevant may help overcome this barrier. In this article, we report a large-n survey experiment on San Francisco Bay Area residents to investigate how providing spatially-resolved risk information to individuals shapes their climate risk perceptions in the context of sea-level rise. Our results suggest that personalized risk messaging can sometimes reduce concern about sea-level rise. These experimental effects are limited to respondents who believe that climate change is happening. Further, we do not find an effect of providing local risk messages on an individual's willingness to pay for regional climate adaptation measures. Our results emphasize that local messaging strategies around sea-level rise risks may not have the clear impacts that some advocates and scholars presume.     

Circumspection, reciprocity, and optimal carbon prices

Assessments of the benefits of climate change mitigation—and thus of the appropriate stringency of greenhouse gas emissions abatement—depend upon ethical, legal, and political economic considerations. Global climate change mitigation is often represented as a repeated prisoners’ dilemma in which the net benefits of sustained global cooperation exceed the net benefits of uncooperative unilateral action for any given actor. Global cooperation can be motivated either by circumspection—a decision to account for the damages one’s own actions inflict upon others—or by the expectation of reciprocity from others. If the marginal global benefits of abatement are approximately constant in total abatement, the domestically optimal price approaches the global cooperative optimum linearly with increasing circumspection and reciprocity. Approximately constant marginal benefits are expected if climate damages are quadratic in temperature and if the airborne fraction of carbon emissions is constant. If, on the other hand, damages increase with temperature faster than quadratically or carbon sinks weaken significantly with increasing CO₂ concentrations, marginal benefits will decline with abatement. In this case, the approach to the global optimum is concave and less than full circumspection and/or reciprocity can lead to optimal domestic abatement close to the global optimum.     

Funding low-carbon investments in the absence of a carbon tax

Introducing a carbon tax is difficult, partly because it suggests that current generations have to make sacrifices for the benefit of future generations. However, the climate change externality could be corrected without such a sacrifice. It is possible to set a carbon value, and use it to create ‘carbon certificates’ that can be accepted as part of commercial banks’ legal reserves. These certificates can be distributed to low-carbon projects, and be exchanged by investors against concessional loans, reducing capital costs for low-carbon projects. As the issuance of carbon certificates would increase the quantity of money, it will either lead to accelerated inflation or induce the Central Bank to raise interest rates. Low-carbon projects will thus have access to cheaper loans at the expense of either ‘regular’ investors (in case of higher interest rates) or of lenders and depositors (in case of accelerated inflation). Within this scheme, mitigation expenditures are compensated by a reduction in regular investments, so that immediate consumption is maintained. It uses future generation wealth to pay for a hedge against climate change. This framework is not as efficient as a carbon tax but is politically easier to implement and represents an interesting step in the trajectory towards a low-carbon economy.     

Time Discounting and Optimal Emission Reduction: An Application of FUND

Time preferences are a dominant influence in cost-benefit analyses of long-term issues such as climate change. FUND, a model for optimal emission control, is used to spell out this influence. Classic discounting at various rates is contrasted with Heal discounting where the discount factor depends logarithmically on the time distance (it does linearly in the classic case), and Rabl discounting where the discount rate is set to zero at a certain point in the future. The choice of the discount rate has a strong influence on total and short-term emission reduction. The effect of Rabl and Heal discounting is like lowering the classic discount rate. International cooperation has a larger effect on optimal emission reduction, however, than does the discount rate. Larger still is the influence of explicitly taking up long-term goals for atmospheric concentrations in the welfare function, using a modification of the Chichilnisky criterion.     

Combined inequality in wealth and risk leads to disaster in the climate change game

It is generally agreed that the risk of catastrophic climate change can only be reduced if agents cooperate to reduce greenhouse gas emissions over the course of the 21st Century. Previous economic experiments have suggested that sufficient cooperation can often be achieved providing individuals are adequately and convincingly informed of the consequences of their actions and the stakes involved. However, this previous work, has not allowed for the fact that in the real world agents vary in both: (1) their resources to mitigate climate change, and (2) the consequences that they face from climate change. We develop and expand the protocol of previous economic experiments to investigate the introduction of such combined asymmetries. We find that when inequality in resources is combined with a greater relative risk for poorer members, cooperation collapses, with tragic consequences. This is because the rich invest proportionally less into preventing climate change when they are less at risk. We also find, through the use of a post-game questionnaire, that those individuals who were more skeptical about climate change in the real world cooperated less in our games. Insofar as such experiments can be trusted as a guide to either people’s everyday behaviour or the interactions of nation states, these results suggest that voluntary cooperation to avoid climate catastrophe in the real world is likely to be hard to achieve.     

Integrated assessment of abrupt climatic changes

One of the most controversial conclusions to emerge from many of the first generation of integrated assessment models (IAMs) of climate policy was the perceived economic optimality of negligible near-term abatement of greenhouse gases. Typically, such studies were conducted using smoothly varying climate change scenarios or impact responses. Abrupt changes observed in the climatic record and documented in current models could substantially alter the stringency of economically optimal IAM policies. Such abrupt climatic changes — or consequent impacts — would be less foreseeable and provide less time to adapt, and thus would have far greater economic or environmental impacts than gradual warming. We extend conventional, smooth IAM analysis by coupling a climate model capable of one type of abrupt change to a well-established energy–economy model (DICE). We compare the DICE optimal policy using the standard climate sub-model to our version that allows for abrupt change — and consequent enhanced climate damage — through changes in the strength (and possible collapse) of the North Atlantic thermohaline circulation (THC). We confirm the potential significance of abrupt climate change to economically optimal IAM policies, thus calling into question all previous work neglecting such possibilities — at the least for the wide ranges of relevant social and climate system parameters we consider. In addition, we obtain an emergent property of our coupled social–natural system model: “optimal policies” that do consider abrupt changes may, under relatively low discount rates, calculate emission control levels sufficient to avoid significant abrupt change, whereas “optimal policies” disregarding abrupt change would not prevent this non-linear event. However, there is a threshold in discount rate above which the present value of future damages is so low that even very large enhanced damages in the 22nd century, when a significant abrupt change such as a THC collapse would be most likely to occur, do not increase optimal control levels sufficiently to prevent such a collapse. Thus, any models not accounting for potential abrupt non-linear behavior and its interaction with the discounting formulation are likely to miss an important set of possibilities relevant to the climate policy debate.     

OK Boomer: A decade of generational differences in feelings about climate change

The emergence of concern about and evidence of climate change has been argued to create a cultural milieu unique to the Millennial generation (born between 1981 and 1996) and iGeneration (aka iGens or Generation Z born after 1997). The present research tested a) claims of unique angst about climate change among younger versus older generations, b) growing generational discrepancies over time in emotions about climate change, c) generational differences for several emotions about climate change, and d) the implications of these emotions for motivating people to discuss climate change with others, potentially aiding coping with climate change and facilitating action to address climate change. Survey data gathered from 2010 to 2019 of a representative sample of United States residents (N = 22,468) document greater increases in worry about climate change and, to a lesser degree, anger and guilt about climate change, within the two youngest generations relative to changes among Generation X, Baby Boomers, and the Silent and Greatest Generations. Although generational differences were small and suggest overstatements of unique effects for younger generations, increases in younger generations’ emotions transform into the two youngest generations reporting the strongest emotions in 2019. Over ten years, these differential shifts in emotions explain more substantial increases in the frequency of discussing climate in the youngest generations.     

Multipurpose agroforestry as a climate change resiliency option for farmers: an example of local adaptation in Vietnam

Increasing frequency, intensity and duration of severe weather events are posing major challenges to global food security and livelihoods of rural people. Agriculture has evolved through adaptation to local circumstances for thousands of years. Local experience in responding to severe weather conditions, accumulated over generations and centuries, is valuable for developing adaptation options to current climate change. This study aimed to: (i) identify tree species that reduce vulnerability of cropping systems under climate variability; and (ii) develop a method for rapidly assessing vulnerability and exploring strategies of smallholder farmers in rural areas exposed to climate variability. Participatory Rural Appraisal methods in combination with Geographical Information Systems tools and statistical analysis of meteorological data were used to evaluate local vulnerability to climate change and to investigate local adaptation measures in two selected villages in Vietnam, one of the countries most vulnerable to climate change. The low predictability of severe weather events makes food crops, especially grain production, insecure. This study shows that while rice and rain-fed crops suffered over 40 % yield losses in years of extreme drought or flood, tree-based systems and cattle were less affected. 13 tree species performed well under the harsh local climate conditions in home and forest gardens to provide income, food, feed and other environmental benefits. Thus, this research suggests that maintenance and enhancement of locally evolved agroforestry systems, with high resilience and multiple benefits, can contribute to climate change adaptation.     

Economic and environmental effectiveness of a technology-based climate protocol

Abstract

The present stalemate in climate negotiations between the USA and the other Annex I countries has led policy analysts and economists to explore the possible emergence of alternative climate regimes that may be applied after 2012. This article explores the idea of replacing international cooperation on greenhouse gas emission control with international cooperation on climate-related technological innovation and diffusion. This idea—recently proposed among others by Barrett (2001) and Benedick (2001)—is based on the insight that incentives to free-ride are much smaller in the case of technological cooperation than in the case of cooperation on emission control. This article provides a first applied game theory analysis of a technology-based climate protocol by assessing: (i) the self-enforcingness (namely, the absence of incentives to free-ride) of the coalition that would form when countries negotiate on climate-related technological cooperation; (ii) the environmental effectiveness of a technology-based climate protocol. The analysis is carried out by using a model in which endogenous and induced technical change are explicitly modelled. The results of our analysis partly support Barrett's and Benedick's conjectures. On the one hand, a self-enforcing agreement is more likely to emerge when countries cooperate on environmental technological innovation and diffusion than when they cooperate on emission abatement. However, technological cooperation—without any commitment to emission control—may not lead to a sufficient abatement of greenhouse gas concentrations.     

A Social Discount Rate for Climate Damage to Future Generations Based on Regulatory Law

This article examines the implications for the social discount rate for damage due to climate change if risk to future generations is handled in accordance with the laws regulating our handling of risk to contemporaries. The conclusions are the following. Under current law, neither geographic distance nor differences in wealth between risk creator and risk bearer play any part in establishing a standard of ‘reasonable care'. The concept of intergenerational justice requires these same principles to be applied in the intergenerational context too, implying a zero consumption rate of interest for climate damage. Assuming that the extent to which mitigation is at the expense of alternative investments is equal to society's marginal propensity to save, the social discount rate becomes society's marginal propensity to save times the long-term market rate of return on private investment, implying a social discount rate of around one per cent or a fraction of one per cent. This formula is exact under the assumption of average saving behaviour and by attributing consumption losses due to investment in damage prevention before damage occurs to the risk creator and after damage occurs to the risk bearer.     

The problem of the future in postwar Anglo-American political philosophy

Among the conceptual problems raised by climate change is that of how to think about the future. Theories of intergenerational justice and other accounts of obligations to the future in Anglo-American philosophy tend to argue that the remote future matters morally. Where did these arguments come from? This essay explores the roots of contemporary ideas about the remote future in debates that took place among Anglophone philosophers in the 1970s.     

Climate change impacts and adaptation of commercial marine fisheries in Australia: a review of the science

Commercial marine fishing contributes significantly to the Australian economy, and has great importance for coastal communities. However, climate change presents significant challenges for Australia’s fishing industries, now and into the future. With greater use of targeted information, the fishing industry will be better placed to minimise the negative impacts and take advantage of opportunities associated with the effects of climate change. The future of the fishing industry—specifically wild capture fisheries—will depend on its ability and capacity to apply appropriate adaptation strategies for its viability and sustainability in the long-term. Knowledge regarding expected long-term changes in species distributions, improved weather and seasonal climate forecasts and their influence on target species, and better understanding of species tolerances, can inform adaptation responses. This paper provides a review of recent advances in research addressing Australia’s priorities in relation to commercial marine fisheries’ responses to current and anticipated future climate change impacts, and considers barriers and adaptation options for fisheries management over the near-term planning horizon of 5–7 years.     

Why is risk aversion unaccounted for in environmental policy evaluations?

U.S. environmental regulations are increasingly influenced by cost-benefit analyses that are performed based on the guidance of the Office of Management and Budget (OMB). The OMB’s Circular A-4 directs Federal agencies to assume “risk neutrality” in conducting regulatory analysis, and in important instances, this guidance is not supported by economic theory. Risk neutrality is computationally convenient, and it can be justified when only the costs and benefits of regulations themselves are uncertain, because these risks are spread across a large population. However, the Circular A-4 does not distinguish between regulations that cause uncertainty and those that reduce pre-existing (i.e. baseline) uncertainty, such as the potential for catastrophic climate change. Basic economic theory shows that risk aversion should be incorporated into evaluations of policies that reduce pre-existing environmental uncertainty. Regulatory analyses generally ignore these risk-reduction benefits, leading to misinformed policymaking. Quantifying risk premiums is difficult and controversial, but no more so than discounting future costs and benefits to present value terms. Similar to how OMB has established discount rates for use in regulatory analyses, a method for when and how to incorporate risk aversion into policy evaluations should replace the blanket guidance for risk neutrality.     

Refining rainfall projections for the Murray Darling Basin of south-east Australia—the effect of sampling model results based on performance

One of the aims of developing new climate projections is to better address the requirements of stakeholders—particularly those who require less uncertainty and/or probabilistic information to work with. Projections are continually updated over time as more, and newer, climate model simulations of the future become available but this can introduce problems when it comes to interpreting large samples with differing results. Regional projections of rainfall are characterised by a high level of uncertainty, partly because of different sensitivities of the different models. Some models can be demonstrated to perform relatively poorly when assessed by their ability to simulate present-day means and variability and here we show that the uncertainty in model projections can potentially be reduced when the projection from these models are either discounted or ignored entirely. When applied to the Murray Darling Basin of south east Australia, it is possible to demonstrate a clustering of the results from the better performing models. These indicate that the rainfall changes to be expected as a result of increased greenhouse gas concentrations into the future are more likely to be at the drier end of the full set of model results. This occurs because the better performing models indicate decreases in winter and spring which are significantly different to the changes indicated by the other models. These results suggest that there are compelling reasons for discounting, if not entirely dismissing, some model results based on their failure to satisfy some basic performance criteria.     

Methodological and empirical flaws in the design and application of simple climate-economy models

One of the main arguments brought forward in favour of the continued use of simple climate-economy models is their transparency, which should enable researchers to easily interpret the simulation results and adapt the model to their specific research interests. We investigate the degree to which this claim is supported in the case of the DICE model but most of our findings are relevant for other welfare-optimizing climate-economy models as well. Specifically, this paper reviews the handling of time discounting in social welfare functions, the combination of different social welfare functions in an analysis, the calibration of uncertain climate parameters, the representation of uncertainty about future climate change, and the evolution of carbon abatement costs over time. We find that each of these aspects has been treated inconsistently in the past, and that these inconsistencies can strongly affect the results of several previous studies. We discuss the methodological questions raised by some of these problems and make specific recommendations how to avoid the problems identified here in future analyses.