Transcript Approaches to Valuing Climate Change Impacts

The Impacts of Climate Change:
An Overview
MS&E 290
Public Policy Analysis
March 2, 2004
Cost/Benefit Modeling Approach:
Balancing the Costs of Controlling Carbon Emissions
Against the Costs of the Climate Ipacts They Cause
Marginal Cost
of Climate Impacts
Value/Cost
of
Emissions
Reductions
Marginal Cost
of Emissions Control
Carbon Emissions
Areas Where Climate Change
Impacts Are Anticipated
MARKET
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Agriculture
Forestry
Sea Level Rise
Water Supply
Energy Consumption
Fisheries
Extreme
Events/Insurance
NON-MARKET
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Unmanaged EcoSystems
– Terrestrial
– Marine
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*Some Market Components 
Human Health*
Bio-Diversity*
Wildlife
Recreation*
Amenities
Components of Impact Assessments
• System Exposure
– Extent to Which Climate Will Change Where System Is
• Sensitivity
– How System Responds to Changes in Climate
• Adaptability
– Extent to Which System Can Adjust to Those Changes
• Vulnerability
– Damage or Harm Given Exposure, Sensitivity and
Adaptability
• The Parable of the “Dumb Farmer”
An Understudied Policy Option:
Anticipatory Government
Instigated Adaptation
• Climate is Going to Change in Any Case
• In Some Cases Adapting May be Cheaper
and More Effective Than Mitigating
• Helping People Adapt to Current Climate
Variability May be a Very Good First Step
Key Challenges Faced
in Projecting Impacts
• Projecting Regional Climate
– Temperature
– Precipitation
– Variability
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Projecting Baseline Conditions
Transient Versus Equilibrium Impacts
Factoring In Adaptation
Valuing Non-Market Impacts
Approaches to Valuing Climate
Change Impacts
• Structural Models
– Output = fcn.(Inputs)
• Aggregate Statistical Models
– Use Variation Across Regions
• Travel Cost Models
– Value of Recreation > Cost of Doing It
• Contingent Valuation Surveys
– Use of Questionnaires to Assess Values
Key Determinants of the
Costs of Climate Impacts
Value
of
Emissions
Reductions
More Sensitivity to
Rate of Change
More Activity
in Sector
More Adaptation
More Technological Change
Carbon Emissions
Other Important Factors
Vulnerability to Variability
IPCC Synthesis into
Causes for Concern
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Risks to Unique and Threatened Systems
Risks from Extreme Climate Events
Distribution of Impacts
Aggregate Impacts
Risks from Future Large-Scale Discontinuities
KEY FINDINGS
of National Climate Change Impact
Assessment Report
1. Increased warming
2. Differing regional impacts
3. Vulnerable ecosystems
4. Widespread water concerns
5. Secure food supply
6. Near-term increase in forest growth
7. Increased damage in coastal and permafrost areas
8. Adaptation determines health outcomes
9. Other stresses magnified by climate change
10. Uncertainties remain and surprises are expected