Projected hydroclimate changes over Andean basins in central Chile from downscaled CMIP5 models under the low and high emission scenarios

This study examines the projections of hydroclimatic regimes and extremes over Andean basins in central Chile (～ 30–40° S) under a low and high emission scenarios (RCP2.6 and RCP8.5, respectively). A gridded daily precipitation and temperature dataset based on observations is used to drive and validate the VIC macro-scale hydrological model in the region of interest. Historical and future simulations from 19 climate models participating in CMIP5 have been adjusted with the observational dataset and then used to make hydrological projections. By the end of the century, there is a large difference between the scenarios, with projected warming of ～ + 1.2 °C (RCP2.6), ～ +?3.5 °C (RCP8.5) and drying of ～ ? 3% (RCP2.6), ～ ? 30% (RCP8.5). Following the strong drying and warming projected in this region under the RCP8.5 scenario, the VIC model simulates decreases in annual runoff of about 40% by the end of the century. Such strong regional effect of climate change may have large implications for the water resources of this region. Even under the low emission scenario, the Andes snowpack is projected to decrease by 35–45% by mid-century. In more snowmelt-dominated areas, the projected hydrological changes under RCP8.5 go together with more loss in the snowpack (75–85%) and a temporal shift in the center timing of runoff to earlier dates (up to 5 weeks by the end of the century). The severity and frequency of extreme hydroclimatic events are also projected to increase in the future. The occurrence of extended droughts, such as the recently experienced mega-drought (2010–2015), increases from one to up to five events per 100 years under RCP8.5. Concurrently, probability density function of 3-day peak runoff indicates an increase in the frequency of flood events. The estimated return periods of 3-day peak runoff events depict more drastic changes and increase in the flood risk as higher recurrence intervals are considered by mid-century under RCP2.6 and RCP8.5, and by the end of the century under RCP8.5.     

Assessing the EU ETS with a bottom-up,multi-sector model

The European Emissions Trading System (EU ETS) is the central pillar of the EU response against climate change. This trading mechanism is considered, from the theoretical point of view, as the most cost-effective method to reduce GHG. However, previous studies show that the agents who participate in these markets may behave in a way that may lead to inefficient CO₂ prices, creating doubts about the static and dynamic efficiency of the system. This article analyses these possible anomalies by first trying to model the ETS in a more realistic way, addressing some of the limitations of previous models, and second, by comparing the results with real market transactions. For this, a bottom-up, multi-sector model has been built, which represents the EU ETS in an integrated, cross-sectoral way, paying particular attention to the interactions among the most emissions intensive industries. The results show the benefits of this modelling approach and how it better reflects real market conditions. Some preliminary conclusions regarding the behaviour of the agents in the ETS market are also presented.

POLICY RELEVANCE

Low allowance prices in the EU ETS have put into question the dynamic efficiency of the EU ETS system, prompting various ideas for structural reform. However, determining the right reform also requires estimating correctly how agents will respond to it. This article proposes a tool to realistically simulate the EU ETS under the assumption of rational agents, and compare it to real market outcomes, in order to understand better the behaviour of agents in this carbon market, and therefore how to design better policies.