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The Coupling of Climate and Economic Dynamics: Essays on Integrated Assessment

Alain Haurie ; Laurent Viguier (eds.)

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Institución detectada Año de publicación Navegá Descargá Solicitá
No detectada 2005 SpringerLink

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Tipo de recurso:

libros

ISBN impreso

978-90-481-6861-3

ISBN electrónico

978-1-4020-3425-1

Editor responsable

Springer Nature

País de edición

Reino Unido

Fecha de publicación

Información sobre derechos de publicación

© Springer-Verlag Berlin Heidelberg 2005

Tabla de contenidos

Linking Climate and Economic Dynamics

Neil Edwards; Hubert Greppin; Alain Haurie; Laurent Viguier

This chapter presents in a broad perspective the links that exist between climate and economic dynamics. We deal in particular with the interactions and feedbacks that may link these two dynamical systems and with possible approaches to modelling, and ultimately controlling, them in order to reach a sustainable development path. The paper provides a general introduction to the different chapters that constitute the rest of the book.

Pp. 1-34

Coupling Climate and Economic Dynamics: Recent Achievements and Unresolved Problems

F. L. Toth

Anthropogenic climate change poses unprecedented challenges for the scientific and policy communities alike. The intermingled socio-economic and biogeophysical processes involved in the problem require joint work of many disciplines culminating in integrated climate-economy models. Distinctive attributes of the climate change problem make it difficult for modelers trying to replicate the dynamics of the climate-economy interactions to provide guidance for policymaking. Processes ranging across multiple time horizons, geographical scales, decision-making levels, and response options, all with multiple layers of detail of their own complexities, need to be consolidated at a level that properly depicts key features of the individual component and permits integration with others. The inverse assessment framework and its implementation in an integrated economy-climate model are presented to illustrate one attempt to resolve this conundrum. Due to the diversity of the policy-related questions and the conceptual, methodological, and computational difficulties of integration, a promising strategy involves flexible problem-oriented coupling of selected elements of a compatible set of models developed in an internally consistent integrated assessment framework.

Pp. 35-68

An Oracle Method to Couple Climate and Economic Dynamics

Cesar Beltran; Laurent Drouet; Neil Edwards; Alain Haurie; Jean-Philippe Vial; Daniel Zachary

This paper deals with an oracle method to couple economic and climate models. The approach permits a dialogue between two models pertaining to two different scientific domains, the climate module being a fully-coupled ocean-atmosphere-sea ice model, whereas the economic module is an adaptation of the neo-classical optimal economic growth paradigm. The paper explains how the Analytic Center Cutting Plane Method (ACCPM) is implemented to integrate in the optimal economic growth model a constraint on climate change that is computed from the climate model runs. Several experiments show the usefulness of the approach to build new types of integrated assessment meta-models.

Pp. 69-95

An Abrupt Stochastic Damage Function to Analyze Climate Policy Benefits

Patrice Dumas; Minh Ha-Duong

This paper studies uncertainty about the non-linearity of climate change impact. The DIAM 2.3 model is used to compute the sensitivity of optimal CO emissions paths with respect to damage function parameters. This builds upon results of the EMF–14 uncertainty subgroup study by explicitly allowing for the possibility of threshold effects and hockey stick damage functions. It also extends to the cost-benefit framework previous studies about inertia of energy systems. Results show that the existence of a threshold in the damage function is critical to precautionary action. Optimal path are much less sensitive to uncertainty on the scale of the damages than on the threshold values.

Pp. 97-111

A Viability Approach to Global Climate Change Issues

Jean-Pierre Aubin; Telma Bernado; Patrick Saint-Pierre

The main purpose of viability theory is to explain the evolution of the state of a control system governed by nondeterministic dynamics and subjected to viability constraints, reveal the concealed feedbacks which allow the system to be regulated and provide selection mechanisms for implementing them. It assumes implicitly an “opportunistic” and “conservative” behavior of the system: a behavior which enables the system to keep viable solutions as long as its potential for exploration (or its lack of determinism) — described by the availability of several evolutions — makes its regulation possible. It also happens that these results can be used to study infinite horizon optimal control problems, with in-tergenerational constraints, with nonstandard inter-temporal optimality criteria bearing not only on the evolutions of the states and the controls, but also on the velocities of the controls, allowing us in particular to minimize maximal inertia. We illustrate these points with simplified Greenhouse Gas models, where we minimize the worst transition cost of changing the short-term pollution rate (or economic growth) in order to maintain the concentration of greenhouse gases bounded.

Pp. 113-143

Climate Policy Cooperation Games between Developed and Developing Nations: A Quantitative, Applied Analysis

Claudia Kemfert

This paper investigates climate control coalition games of developed and developing nations. It studies whether incentives exist for non-cooperating nations to join a coalition based upon issue linkage. Issue linkage is considered through increased R&D expenditures triggering improved technological innovations that advance energy efficiencies. Model calculations demonstrate that incentives exist for non-cooperating countries to join a climate control coalition if nations cooperate on technological innovations. Restrictions on trade such as sanction mechanisms against non-cooperating countries are not necessarily an incentive to join a coalition. Technological spillover effects lead to improved economic situations and increased energy efficiencies in non-cooperating countries. We compare climate control coalitions of developed and developing nations. Developing nations can benefit by climate control if it is linked with technology cooperation.

Pp. 145-171

Back to Kyoto? US Participation and the Linkage between R&D and Climate Cooperation

Barbara Buchner; Carlo Carraro; Igor Cersosimo; Carmen Marchiori

The US decision not to ratify the Kyoto Protocol and the subsequent outcomes of the Bonn and Marrakech Conferences of the Parties drastically reduce the effectiveness of the Kyoto Protocol in controlling GHG emissions. The reason is not only the reduced emission abatement in the US. Lower spillover effects on technology and an increase in Russia’s bargaining power were also induced by the US decision. It is therefore crucial to analyse whether an incentive strategy exists that could induce the US to revise its decision and comply with the Kyoto commitments. One solution, occasionally proposed in literature and in actual policymaking, is to link negotiations on climate change control with decisions concerning international R&D cooperation and technology transfers. This paper explores this idea by analysing on the one hand the incentives for the EU, Japan and Russia to adopt an “issue linkage” strategy, and on the other hand the incentives for the US to join a coalition cooperating both on climate change control and on technological innovation. The extended regime in which cooperation takes place on both dimensions (GHG emissions and R&D) will be examined from the view point of countries’ profitability and free-riding incentives. The effectiveness and credibility of the “issue linkage” strategy will thus be assessed.

Pp. 173-204

Global Energy and CO Emission Scenarios: Analysis with a 15-Region World MARKAL Model

Maryse Labriet; Richard Loulou; Amit Kanudia

A new version of the advanced multi-region World MARKAL model has been developed and calibrated to the A1B scenario of IPCC over a 50-year time horizon. The analysis of the base and COconstrained cases confirms and refines several conclusions observed by other models. Amongst them: a) the level of non-emitting electricity generation in the base case is a crucial assumption for defining COreduction opportunities; b) COcapture and sequestration compete directly with renewable electricity generation and contribute to a major reduction in the marginal cost of CO; c) the primary consumption of coal may increase in the long term when associated with the capture of flue gas COat power plants; d) in transportation, the substitution of oil by biomass is robust and much preferred to the other alternative technologies; e) the price-induced reduction of elastic demands also contributes to the emissions reduction. The resulting annualized cost of COpolicies remains under 1% of the GDP in 2050 for the stabilization of COconcentration at 550 ppmv (A1B base case). Hydrogen production and end-uses technologies, COcapture and sequestration, as well as non-COgreenhouse gases would deserve more attention. Future work will focus on the modelling and comparison of the cooperative and non-cooperative international frameworks.

Pp. 205-235

Flexible Carbon Mitigation Policies: Analysis with a Global Multi-Regional MARKAL Model

Peter Rafaj; Socrates Kypreos; Leonardo Barreto

The Swiss National Centre of Competence in Research (NCCR-Climate) explores the predictability, variability and risks of climate change and the socio-economic response to it. The Paul Scherrer Institut (PSI) and the University of Geneva contribute to this programme by using models to simulate the impacts of policies for climate change mitigation. This study quantifies the benefits of several policies enhancing the flexibility of carbon dioxide (CO) mitigation, with emphasis placed on emissions trading, optimal timing paths and support for learning-by-doing (LBD) in the use of low-carbon technologies. We present illustrative results for a “Soft-landing” scenario, which imposes a CO-emission stabilization target that is consistent with stabilizing COconcentration at 550 ppmv in the long run. This analysis has been conducted with the Global MARKAL Model (GMM), which is a multi-regional, “bottom-up”, partial equilibrium energy-system model with endogenized technology learning (ETL). Incorporation of flexible COmitigation policies leads to significant reductions in energy-system costs and marginal costs of COabatement as well as increasing diffusion of advanced low-carbon technologies. In the future, an extended GMM model could be linked to a climate model (e.g., C-Goldstein, Marsh et al., 2002) to implement an Integrated Assessment Model (IAM) that would allow examining impacts of climate change.

Pp. 237-266

Air Pollution Health Effects: Toward an Integrated Assessment

Trent Yang; John Reilly; Sergey Paltsev

In this paper we develop a methodology for integrating the health effects from exposure to air pollution into the MIT Emissions Prediction and Policy Analysis (EPPA) model, a computable general equilibrium model of the economy that has been widely used to study climate change policy. The approach incorporates market and non-market effects of air pollution on human health, and is readily applicable to other environmental damages including those from climate change. The estimate of economic damages depends, of course, on the validity of the underlying epidemiological relationships and direct estimates of the consequences of health effects such as lost work and non-work time and increased medical expenses. We apply the model to the US for the historical period ranging from 1970 to 2000, and reevaluate estimates of the benefits of US air pollution regulations originally made by the US Environmental Protection Agency. We also estimate the economic burden of uncontrolled levels of air pollution over that period. Our estimated benefits of regulation are somewhat lower than the original EPA estimates, and we trace that result to our development of a stock model of pollutant exposure that predicts that the benefits from reduced chronic air pollution exposure will only be gradually realized. As modelled, only population cohorts born under lower air pollution levels fully realize the benefits. While other assumptions about the nature of health effects of chronic exposure are possible, some version of a stock model of this type is needed to accurately estimate the timing of benefits of reduced pollution.

Pp. 267-293