A CER discounting scheme could save climate change regime after 2012

We can generate a net global GHG emission reduction from developing countries (in an UNFCCC term, non-Annex 1 Parties) without imposing targets on them, if we discount CERs generated from CDM projects. The CER discounting scheme means that a part or all of CDM credits, i.e., CERs, made by developing countries through unilateral CDM projects will be retired rather than sold to developed countries to increase their emissions. It is not feasible to impose certain forms of target (whether sectoral or intensity targets) on non-Annex 1 whose emission trend is hard to predict and whose industrial structure is undergoing a rapid change.

Instead of imposing targets (a command and control approach), we should apply market instruments in generating a net global emission reduction from non-Annex 1. Since April 2005 when the first unilateral CDM was approved by the CDM Executive Board, CDM has been functioning as a market mechanism to provide incentives for developing countries to initiate their own emission reduction projects. As CDM is the only market mechanism engaging developing countries in the Kyoto Protocol, we should try to re-design CDM so that it can generate net global emission reductions by introducing the idea of discounting CERs. But in order to produce meaningful GHG emission reductions by discounting CERs, the project scope of CDM has to be expanded by relaxing project additionality criteria while maintaining strict technical additionality criteria. Agreeing on the CERs Discounting Scheme will have a better political chance than agreeing on imposing emission reduction targets on developing countries.     

Discounting and relative prices

Environmentalists are often upset at the effect of discounting costs of future environmental damage, e.g., due to climate change. An often-overlooked message is that we should discount costs but also take into account the increase in the relative price of the ecosystem service endangered. The effect of discounting would thus be counteracted, and if the rate of price rise of the item was fast enough, it might even be reversed. The scarcity that leads to rising relative prices for the environmental good will also have direct effects on the discount rate itself. The magnitude of these effects depends on properties of the economy’s technology and on social preferences. We develop a simple model of the economy that illustrates how changes in crucial technology and preference parameters may affect both the discount rate and the rate of change of values of environmental goods. The combined effect of discounting and the change of values of environmental goods is more likely to be low – or even negative – the lower the growth rate of environmental quality (or the larger its decline rate), and the lower the elasticity of substitution between environmental quality and produced goods.     

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.     

Greenhouse Gas Emissions and Costs over the Life Cycle of Wood and Alternative Flooring Materials

Increased use of wood can substitute more energy demanding products and thus contribute to a long-term solution to the global warming problem. The aim of this article is to provide an empirical study on this substitution impact, its cost-effectiveness, and which methodological assumptions that are of highest importance for the results obtained. We have made a case study where we compare use of various flooring materials. The results show that floor covering in solid oak causes lower greenhouse gas (GHG) emissions than the other materials. The difference can be ranked in the following order, after their potential for reduction in GHG emissions: Carpet in wool, carpet in polyamide, vinyl, and linoleum. At 2% pro anno discount rate, the avoided GHG emission in tons per m³ of oak flooring used is 0.1–1.9 for linoleum, and 11.8–15.5 for wool carpets. Unless the solution in solid oak is on total less expensive over the lifetime of the building, only the price of avoided emissions from a substitution between solid oak and carpet in wool is reasonable, compared to present carbon fees. The assumptions that influence the result most are choice of discount rate, carbon fixation on forest area, and waste handling. Empirical case studies like this indicate GHG emission reduction potentials caused by substitution, but should be complemented by dynamic input/output analyses and econometric studies. To analyse the flow of CO₂ over time, they should also be linked to forest management models.     

The economics of inaction on climate change: a sensitivity analysis

Abstract

Economic models of climate change often take the problem seriously, but paradoxically conclude that the optimal policy is to do almost nothing about it. We explore this paradox as seen in the widely used DICE model. Three aspects of that model, involving the discount rate, the assumed benefits of moderate warming, and the treatment of the latest climate science, are sufficient to explain the timidity of the model's optimal policy recommendation. With modifications to those three points, DICE shows that the optimal policy is a much higher and rapidly rising marginal carbon price; and that higher carbon price has a greater effect on physical measures of climate impacts. Our modifications exhibit nonlinear interactions; at least at low discount rates, there is synergy between individual changes to the model. At low discount rates, the inherent uncertainty about future damages looms larger in the analysis, rendering long-run economic modelling less useful. Our analysis highlights the sensitivity of the model to three debatable assumptions; it does not, and could not, lead to a more reliably ‘optimal’ cost of carbon. Cost-effectiveness analysis, focusing on the generally shorter-term cost side of the problem, reduces the economic paradoxes of the long run, and may make a greater contribution than economic optimization modelling.     

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.     

Sensitivity Study of Optimal CO2 Emission Paths Using a Simplified Structural Integrated Assessment Model (SIAM)

A structurally highly simplified, globally integrated coupled climate-economic costs model SIAM (Structural Integrated Assessment Model) is used to compute optimal paths of global CO₂ emissions that minimize the net sum of climate damage and mitigation costs. The model is used to study the sensitivity of the computed optimal emission paths with respect to various critical input assumptions. The climate module is represented by a linearized impulse-response model calibrated against a coupled ocean-atmosphere general circulation climate model and a three-dimensional global carbon-cycle model. The cost terms are represented by strongly simplified expressions designed for maximal transparency with respect to sensitive input assumptions. These include the discount rates for mitigation and damage costs, the inertia of the socio-economic system, and the dependence of climate damages on the change in temperature and the rate of change of temperature. Different assumptions regarding these parameters are believed to be the cause of the marked divergences of existing cost-benefit analyses based on more sophisticated economic models. The long memory of the climate system implies that very long time horizons of several hundred years need to be considered to optimize CO₂ emissions on time scales relevant for a policy of sustainable development. Cost-benefit analyses over shorter time scales of a century or two can lead to dangerous underestimates of the long term climatic impact of increasing greenhouse-gas emissions. To avert a major long term global warming, CO₂ emissions need to be reduced ultimately to very low levels. However, the draw-down can be realized as a gradual transition process over many decades and even centuries. This should nevertheless not be interpreted as providing a time cushion for inaction: the transition becomes more costly the longer the necessary mitigation policies are delayed. However, the long time horizon provides adequate flexibility for later adjustments. Short term energy conservation alone is insufficient and can be viewed only as a useful measure in support of the necessary long term transition to carbon-free energy technologies. For standard climate damage cost expressions, optimal emission paths limiting long term global warming to acceptable sustainable development levels are recovered only if climate damage costs are not significantly discounted. Discounting of climate damages at normal economic rates yields emission paths that are only weakly reduced relative to business as usual scenarios, resulting in high global warming levels that are incompatible with the generally accepted requirements of sustainable development. The solutions are nevertheless logically consistent with the underlying discounting assumption, namely that the occurrence of global warming damages in the distant future as a result of present human activities is of negligible concern today. It follows that a commitment to long term sustainable development, if it in fact exists, should be expressed by an intertemporal relation for the value of the earth's future climate which does not degrade significantly over the time horizon relevant for climate change. Since the future climate is a common assett whose value cannot be determined on the market, the appropriate discount rate for future climate damages should be determined by an assessment of the public willingness to pay today for the mitigation of future climate change. To translate our general conclusions into quantitative cost estimates required by decision makers, the present exploratory study needs to be extended using more detailed disaggregated climate damage and mitigation cost estimates and more realistic socio-economic models, including multi-actor interactions, inherent variability, the role of uncertainty and adaptive control strategies.     

An emission intensity protocol for climate change: an application of FUND

Abstract

An emission intensity protocol to govern long-term international greenhouse gas emission reduction is proposed. The protocol may also be interpreted as a technology protocol. The protocol consists of three parameters: a graduation income, below which countries have no emission reduction obligations; a convergence rate, at which emission intensities should approach that of the most carbon-extensive countries; and an acceleration rate, at which the most carbon-extensive countries should improve their technology over and above the business-asusual scenario. Depending on the parameter values, emission reduction ranges from draconian to almost nil. The graduation income and acceleration rate have the expected effects. The effect of the convergence rate is strongly scenario-dependent; some scenarios, perhaps unrealistically, assume strong technological convergence in the nopolicy case; in other scenarios, adopting ‘best commercial technology in the whole world’ would lead to substantial emission reduction. Not surprisingly, different regions prefer different parameters in the emission intensity protocol. Adopting the opinion of the median voter, atmospheric concentrations of carbon dioxide in the year 2200 would be reduced from 1650 to 950 ppm. This reduction is relatively robust to changes in crucial model parameters. The costs of complying with the emission intensity protocol can be reduced substantially through international trade in emission permits and, in particular, by banking and borrowing.     

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.     

Intertemporal Accounting of Climate Change – Harmonizing Economic Efficiency and Climate Stewardship

Continuing a discussion on the intertemporal accounting of climate-change damages initiated by Nordhaus, Heal and Brown in response to the recent demonstration of Hasselmann et al. that standard exponential discounting applied uniformly to all goods and services invariably leads to a 'climate catastrophe' in cost-benefit analyses, it is argued that (1) there exists no economically satisfactory alternative to cost-benefit analysis for the determination of optimal climate protection strategies, and (2) it is essential to allow for the different long-term evolution of climate damage costs relative to mitigation costs in determining the optimal cost-benefit solution. A climate catastrophe can be avoided only if it is assumed that climate damage costs increase significantly in the long term relative to mitigation costs. Cost-benefit analysis is regarded here in the generalized sense of optimizing a social welfare function that incorporates all relevant 'quality-of-life' factors, including not only consumption and the value of the environment, but also the ethical values of equitable intertemporal and intrasocietal distribution. Thus, economic efficiency and climate stewardship are not regarded as conflicting goals, but as synonyms for a single encompassing economic optimization exercise. The same reasoning applies generally to the problem of sustainable development. To quantify the concept of sustainable development in cost-benefit analyses, the projected time evolution of the future values of natural resources and the environment (judged by the present generation, acting as representative agents of future generations) must be related to the time-evolution of all other relevant quality-of-life factors. Different ethical interpretations of the concept of sustainable development can be readily operationalized by incorporation in a generalized cost-benefit analysis in which the evolution paths of all relevant material and ethical values are explicitly specified.     

Methane Emission Reduction: An Application of FUND

Methane is, after carbon dioxide, the most important anthropogenic greenhouse gas. Governments plan to abate methane emissions. A crude set of estimates of reduction costs is included in FUND, an integratedassessment model of climate change. In a cost-benefit analysis, methane emission reduction is found to be instrumental in controlling the optimal rate of climate change. In a cost-effectiveness analysis, methane emission reduction largely replaces carbon dioxide emission reduction. Methane emission reduction reinforces the case for international cooperation in climate policy, but complicates the efficient allocation of emission reduction efforts. Methane emission reduction at the short run does not help to achieve the ultimate objective of the Framework Convention on Climate Change.     

江苏省雨日及降水量的气候变化研究

利用江苏省1960—2000年13个测站逐日降水资料,分析了41 a来江苏省年、季、月雨日的时空特征和雨日的气候变化。结果表明,江苏省的年雨日已经明显减少,平均每10 a雨日减少10.4 d。各季的雨日都呈负趋势,平均每10 a季雨日减少2.6 d。而秋季雨日减少最明显也最多。雨日长期趋势变化有明显的空间变化。江苏省的年雨日东部比西部减少的多,东部雨日每10 a减少14.6 d。月雨日也呈减少趋势,尤以4月、9月明显。雨日的长期趋势变化与降水量的长期趋势变化并不完全一致,这种不一致表现在长期趋势变化的强度上、范围上。总的来说,雨日的负趋势变化要强于降水量,负趋势的范围也要比降水量来得广一些。     

清洁发展机制（CDM）造林再造林项目碳汇成本研究——以CDM广西珠江流域治理再造林项目为例

以清洁发展机制（CDM）广西珠江流域治理再造林项目为例,对项目及其5种造林模式临时核证减排量（temporary certified emission reduction,缩写为tCER）和长期核证减排量（long-term certified emission reduction,缩写为lCER）成本的动态变化进行了初步研究。结果表明：从项目期初到期末,整个项目及5种造林模式人工林的tCER成本均逐渐降低,其中项目成本由第一承诺期末的40.33 ￥/t CO₂降至最后承诺期末的13.34 ￥/t CO₂;lCER成本先降低后升高,在第一承诺期末均降至最小值,项目成本由第一承诺期末的40.33 ￥/t CO₂增加至最后承诺期末的105.27 ￥/t CO₂;各造林模式tCER和lCER成本均以枫香+杉木、枫香+马尾松较高,马尾松+荷木、马尾松+栎类较低,桉树最低;贴现率对项目tCER和lCER、桉树tCER、枫香+杉木lCER成本影响均较大,而对马尾松+栎类tCER和lCER成本影响均较小;对桉树一个轮伐期内的tCER成本进行了敏感性分析,单位面积碳贮量的变化对其影响较大;考虑木材收益时,项目期末tCER净现值为13.11 ￥/t CO₂,从中反映了该CDM项目实施是可行的。     

The impact of technology availability on the timing and costs of emission reductions for achieving long-term climate targets

While most long-term mitigation scenario studies build on a broad portfolio of mitigation technologies, there is quite some uncertainty about the availability and reduction potential of these technologies. This study explores the impacts of technology limitations on greenhouse gas emission reductions using the integrated model IMAGE. It shows that the required short-term emission reductions to achieve long-term radiative forcing targets strongly depend on assumptions on the availability and potential of mitigation technologies. Limited availability of mitigation technologies which are relatively important in the long run implies that lower short-term emission levels are required. For instance, limited bio-energy availability reduces the optimal 2020 emission level by more than 4 GtCO₂eq in order to compensate the reduced availability of negative emissions from bioenergy and carbon capture and storage (BECCS) in the long run. On the other hand, reduced mitigation potential of options that are used in 2020 can also lead to a higher optimal level for 2020 emissions. The results also show the critical role of BECCS for achieving low radiative forcing targets in IMAGE. Without these technologies achieving these targets become much more expensive or even infeasible.     

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.     

基于KZ滤波的京津冀2013～2018年大气污染治理效果分析

通过国务院“大气十条”等严格的大气污染治理措施的实施,近年来我国空气质量得到全面改善。对大气污染治理效果开展科学分析研究,可为后续空气质量持续改善、污染科学精准治理提供有效科技支撑。由于气象条件是影响污染物浓度分布的重要因素,治理效果分析的一个重要问题是区分气象条件和减排措施对污染物浓度变化的具体贡献。本文利用京津冀地区13个城市2013～2018年86个监测站点逐日PM2.5浓度以及欧洲中期气象预报中心（ECMWF）气象再分析资料,采用KZ（Kolmogorov–Zurbenko）滤波分析PM2.5浓度观测序列的时频特性,将其分解为短期天气影响分量、中期季节变化分量以及长期趋势分量3个部分,针对分解浓度序列建立气象因子回归模型,实现定量评估气象和减排对治理效果的具体贡献。在研究时间段内,京津冀地区13个城市PM2.5浓度的长期分量显著下降（22.2%～58.0%）,其中邢台市下降幅度最大（58.0%）。整体分析表明,气象条件和排放源均有利于大气污染的改善,但减排措施是空气质量显著改善的决定性原因,具体贡献为气象条件的影响占18.5%,排放源的影响占81.5%。逐城分析表明,唐山市的气象条件最有利于PM2.5浓度的减小（29.2%）,而衡水市的减排措施最有利于PM2.5浓度的减小（92.0%）。     

填埋场甲烷排放因素分析及甲烷减排研究进展

垃圾填埋场甲烷排放是全球人为温室气体排放的重要来源,对于整个大气中温室气体增加引起的气候效应的影响不容忽视,是世界各国现代化进程中迫切需要解决的一个严重的社会公害问题.文章从填埋场甲烷产生的相关因素、垃圾处理现状和填埋场甲烷减排技术等方面对国内外研究现状做了总结.甲烷的产生受填埋场中的垃圾特性、含水率、温度、pH值、填埋时间、渗滤液含量和其他因素影响.当前的填埋场减排技术包括原位减排、资源化利用和末端控制等,填埋场可以从多方面共同作用实现减排目标.     

Potential for forest carbon plantings to offset greenhouse emissions in Australia: economics and constraints to implementation

The theoretical potential for carbon forests to off-set greenhouse gas emissions may be high but the achievable rate is influenced by a range of economic and social factors. Economic returns (net present value, NPV) were calculated spatially across the cleared land area in Australia for ‘environmental carbon plantings’. A total of 105 scenarios were run by varying discount rate, carbon price, rate of carbon sequestration and costs for plantation establishment licenses for water interception. The area for which NPV was positive ranged from zero ha for tightly constrained scenarios to almost the whole of the cleared land (104 M ha) for lower discount rate and highest carbon price. For the most plausible assumptions for cost of establishment and commercial discount rate, no areas were identified as profitable until a carbon price of AUD$40 t CO₂ ^?1 was reached. The many practical constraints to plantation establishment mean that it will likely take decades to have significant impact on emission reductions. Every 1 M ha of carbon forests established would offset about 1.4 % of Australia’s year 2000 emissions (or 7.4 Mt CO₂ year^?1) when an average rate of sequestration per ha was reached. All studies that predict large areas of potentially profitable land for carbon forestry need to be tempered by the realities that constrain land use change. In Australia and globally, carbon plantings can be a useful activity to help mitigate emissions and restore landscapes but it should be viewed as a long-term project in which co-benefits such as biodiversity enhancement can be realised.     

Population, uncertainty, and learning in climate change decision analysis

The prospect of learning about various uncertainties relevant to analyses of the climate change issue is important because it can affect estimates of the costs of both damages and mitigation, and it can influence the optimal timing of emissions reductions. Baseline scenarios representing future emissions in the absence of mitigation are one of the major sources of uncertainty. Here we investigate how fast we might realistically expect to learn about the outlook for long-term population growth, as one determinant of future baseline emissions. That is, we estimate how long it might take to substantially revise current estimates of the likelihood of various population size outcomes over the twenty-first century. We draw on recent work showing that, because population growth is path dependent, we can learn about the long term outlook by waiting to observe how population changes in the short term. We then explore the implications of uncertainty and of this learning potential for mitigation costs and for optimal emissions. Using a simple model, we show that uncertainty in population growth translates into an uncertainty in the optimal tax rate of about $200/tC by 2050 for a range of stabilization levels. When learning is taken into account, it allows for mitigation strategies to change in response to new information, leading to a slight reduction in the expected value of mitigation costs, and a substantial reduction in the likelihood of high cost outcomes. We also find that while learning can lead to large revisions over the next few decades in anticipated population growth, this potential does not imply large changes in near-term optimal emissions reductions. Results suggest that further work on the potential for learning about other determinants of emissions could have larger effects on expected mitigation costs.