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

Value/Cost

of Emissions Reductions

Carbon Emissions

Marginal Cost of Climate Impacts

Marginal Cost of Emissions Control

Agriculture Forestry Sea Level Rise Water Supply Energy Consumption Fisheries Extreme

Events/Insurance

Unmanaged Eco-Systems– Terrestrial– Marine

Human Health* Bio-Diversity* Wildlife Recreation* Amenities

MARKET NON-MARKET

*Some Market Components

Areas Where Climate Change Impacts Are Anticipated

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 Facedin Projecting Impacts

• Projecting Regional Climate– Temperature– Precipitation– Variability

• 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 theCosts of Climate Impacts

Value

of Emissions Reductions

Carbon Emissions

More Sensitivity to Rate of Change

More Activity in Sector More Adaptation

More Technological Change

Other Important FactorsVulnerability to Variability

IPCC Synthesis into Causes for Concern

• 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 warming2. Differing regional impacts3. Vulnerable ecosystems

4. Widespread water concerns5. Secure food supply

6. Near-term increase in forest growth7. Increased damage in coastal and permafrost areas

8. Adaptation determines health outcomes9. Other stresses magnified by climate change

10. Uncertainties remain and surprises are expected