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Smart Solutions to Climate Change
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Details

  • 87 b/w illus. 102 tables
  • Page extent: 436 pages
  • Size: 247 x 174 mm
  • Weight: 1 kg

Library of Congress

  • Dewey number: 363.73874
  • Dewey version: 22
  • LC Classification: QC903 .S585 2010
  • LC Subject headings:
    • Climatic changes--Economic aspects
    • Global warming--Economic aspects
    • Climate change mitigation

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 (ISBN-13: 9780521763424)

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Smart Solutions to Climate Change
Cambridge University Press
9780521763424 - Smart Solutions to Climate Change - Comparing Costs and Benefits - Edited by Bj⊘rn Lomborg
Excerpt

Introduction

BjØrn Lomborg

The risks of unchecked global warming are now widely acknowledged: a rise in sea levels threatening the existence of some low-lying coastal communities; pressure on freshwater resources, making food production more difficult in some countries and possibly becoming a source of societal conflict; changing weather patterns providing favorable conditions for the spread of malaria. To make matters worse, the effects will be felt most in those parts of the world which are home to the poorest people who are least able to protect themselves and who bear the least responsibility for the build-up of greenhouse gases (GHGs). Concern has been great, but humanity has so far done very little that will actually prevent these outcomes. Carbon emissions have kept increasing, despite repeated promises of cuts.

As I wrote in The Skeptical Environmentalist (Lomborg 2001), man-made global warming exists. There is still meaningful and important work going on looking at the range of outcomes that we should expect but it is vital to emphasize the consensus on the most important scientific questions. We have long moved on from any mainstream disagreements about the science of climate change. The crucial, relevant conversation of today is about what to do about climate change – the economics of our response.

Finding a better response to global warming has become all the more important as the current political approach – seen at summits in Rio de Janeiro, Kyoto, and Copenhagen, has seemingly run aground. The failure of the Copenhagen Climate Summit in December 2009 was a great disappointment for the millions who had hoped for strong and meaningful action on global warming.

After Copenhagen, political leaders looked for sources of blame. China bore the brunt of western anger, while many declared that the UN negotiation process needed to be reformed.

It is more constructive to consider the range of policy responses that we have, and to identify what we can do in different areas. Economic research serves to underscore some of the hurdles before us – but it also highlights very promising avenues for exploration. It would be morally unconscionable to spend enormous sums of money making a minor difference to long-term global warming and human well-being if we could achieve a lot more impact on the climate – and leave future generations better off – with a smaller investment on smarter solutions.

The research presented in this volume was drafted by expert economists for the Copenhagen Consensus on Climate project, which utilizes a process that was first designed to prioritize global opportunities. The approach is simple, and is founded on the belief that basic principles of economics can be used to help any nation or organization to spend its money to achieve the most “good” possible.

In 2004 and 2008, the Center gathered research on ten key global challenges – from malnutrition to terrorism – and commissioned a panel of expert economists to rank the investments. The research from the Copenhagen Consensus 2004 and the Copenhagen Consensus 2008 is available in Global Crises, Global Solutions (Cambridge University Press, 1st edn., 2005, 2nd edn., 2009).

These projects attracted attention from all around the world. Denmark's government spent millions more on HIV/Aids projects, which topped the economists’ “to do” list in 2004. Micronutrient programs in Africa and elsewhere received significant attention and greater resources after they topped the list in 2008.

The Copenhagen Consensus prioritization process has also been carried out with UN ambassadors from twenty-three nations including China, India and the USA, and for Caribbean and Latin American problems. The research for the latter is available in Latin American Development Priorities (Cambridge University Press, 2009).

These projects showed that an informed ranking of solutions to the world's big problems is possible, and that cost-benefit analyses (CBAs) – much maligned by some – can lead to a clear and compassionate focus on the most effective ways to respond to the real problems of the world's most afflicted people.

Climate change is undoubtedly one of the chief concerns facing the world today. It has attracted top-level political concern and repeated efforts to form a global consensus on carbon cuts. But many questions have remained unaddressed and unanswered. Should politicians continue with plans to make carbon-cutting promises that, on past experience, are unlikely to be fulfilled? What could be achieved by planting more trees, cutting methane (CH4), or reducing black soot emissions? Is it sensible to focus on a technological solution to warming? Or should we focus to adapt to a warmer world?

The research presented in this volume addresses these questions, along with how much each approach would cost and how much it would help in tackling climate change. Most importantly, the research presented together answers a fundamental question that we often overlook: not if we should do something about global warming, but rather how best to go about it. The starting point for every chapter is that global warming is a challenge that humanity must confront.

Just as with any other problem we face, there are many possible remedies, and some of them are much better than others. Not just cheaper, but more effective, more efficient, and – crucially – more likely to actually happen.

This book presents some of the recommended responses to global warming by experts in each field. There is a range of fresh thinking and new approaches. In these pages, for example, you will find one of the first – and certainly the most comprehensive – CBA of climate engineering (CE) options.

For each topic in this book – whether it is CO2 mitigation, adaptation, or technology transfer (TT) – you will find at least two responses. This is because we commissioned a secondary group of qualified economists to provide a critique on the assumptions made in each chapter, for every topic. The “Alternative Perspectives” papers provide another way of looking at the costs, benefits, and risks of a particular response to climate change, and highlight the areas where expert opinion diverges. Some of them also provide an alternative solution, complete with estimates on costs and benefits.

For the topic of Climate Engineering, J. Eric Bickel and Lee Lane (chapter 1) offer an assessment of the potential benefits and costs of such engineering, examining two families of technologies – solar radiation management (SRM) and air capture (AC). Among other findings, they conclude that large potential net benefits of SRM mean that there is strong evidence for researching this technology further in the short term.

Two authors offer different perspectives on CE. Roger A. Pielke, Jr. (Perspective paper 1.1) argues that Bickel and Lane's analysis of SRM is not grounded in a realistic set of assumptions about how the global earth system actually works. He agrees that there is justification for continued research into technologies of SRM, but finds that this judgment does not follow from a CBA. Pielke also summarizes an analysis of the potential role for AC technologies to play in the de-carbonization of the global economy, and argues that since the costs of AC are directly comparable with major global assessments of the costs of conventional mitigation policies, AC also deserves to receive further study.

Anne E. Smith (Perspective paper 1.2) overlays Bickel and Lane's work with a consideration of the potential unintended consequences from CE, and extends it by calculating the value of information (VOI) from research and development (R&D). She then goes further and takes a critical look at the theoretical assumptions underpinning the standard formula for VOI.

On carbon emission reductions, Richard S.J. Tol (chapter 2) examines the costs and benefits of cutting carbon under different scenarios, and finds that while a well-designed, gradual policy of carbon cuts could substantially reduce emissions at low cost to society, ill-designed policies, or policies that seek to do too much too soon, can be orders of magnitude more expensive. He notes that while the academic literature has focused on the former, “policy makers have opted for the latter.” Tol specifically considers five policies for carbon dioxide emission reduction. His findings include the point that very stringent targets, such as the EU's target of keeping temperature rises under 2ºC, may be very costly or even infeasible, while suboptimal policy design would substantially add to the costs of emission abatement.

Onno Kuik (Perspective paper 2.1) is in agreement with most of what is written by Tol on the state of the art of economic research into the impacts of climate change and climate change policies, but highlights a complementary approach based on a direct elicitation of preferences for climate change.

Roberto Roson (Perspective paper 2.2) notes that Tol's chapter is largely based on the Climate Framework for Uncertainty, Negotiation, and Distribution (FUND) model and the results of a set of simulation exercises where a number of policy options are explored and assessed. Roson points out a series of limitations of this model. However, he concludes that when considering the simulation scenarios, “we could have got about the same findings with a different model.”

Brent Sohngen (chapter 3) looks at forestry carbon sequestration and indicates that if society follows an “optimal” carbon abatement policy, as defined in Nordhaus (2009), forestry could accomplish roughly 30% of total abatement over the century, while if society places strict limits on emissions in order to meet a 2ºC temperature increase limitation, then the component that forestry provides lowers overall abatement costs by as much as 50%. Sabine Fuss (Perspective paper 3.1) is in broad agreement with Sohngen's analysis of costs and benefits. She concludes, like Sohngen, that forest carbon will be needed as part of a strategy to mitigate climate change.

Robert E. Baron, W. David Montgomery, and Sugandha D. Tuladhar point out in chapter 4 that a significant share of current net warming is attributable to black carbon. Black carbon is essentially the soot produced through diesel emissions, and – in developing countries – people burning organic matter to cook food and stay warm. It can be eliminated with cleaner fuels and new cooking technologies. Sooty pollution from indoor fires claims several million lives each year so reducing black carbon would also be a life-saver. Black carbon can be controlled in developing countries through the implementation of cleaner fuels, new cooking technologies, and changing crop management practices. The authors present potential ways to implement these policies, and provide cost-benefit (C/B) estimates that indicate that spending around $359 million could slash around 19% of black carbon emissions. Milind Kandlikar, Conor C.O. Reynolds, and Andrew P. Grieshop (Perspective paper 4.1) argue that it is important to recognize that black carbon reductions are not a substitute for reductions in emissions of carbon dioxide (CO2), but that the two approaches must be applied together.

Claudia Kemfert and Wolf-Peter Schill (chapter 5) look at ways to mitigate CH4, a major anthropogenic greenhouse gas (GHG), second only to CO2 in its impact on climate change. They recommend an economically efficient global CH4 mitigation portfolio for 2020 that includes the sectors of livestock and manure, rice management, solid waste, coal mine CH4, and natural gas.

David Anthoff (Perspective paper 5.1) argues that joint methane (CH4) and CO2 emission mitigation is an optimal policy mix and leads to the highest net benefits, suggesting that an “either-or” approach between CO2 or CH4 emission mitigation forgoes at least some joint benefits. Daniel J.A. Johansson and Fredrik Hedenus (Perspective paper 5.2) note that the technical measures available to reduce emissions from livestock, the most important single sector emitting CH4, are small. The combination of being a non-point emission source and having few technical abatement measures implies that output-based policies may be appropriate for reducing these emissions.

Francesco Bosello, Carlo Carraro, and Enrica De Cian (chapter 6) carry out an integrated analysis of both optimal carbon mitigation and adaptation at the global and regional level, and show that, compared to mitigation which reduces mainly future damages, adaptation is more rapidly effective for contrasting future and present damages. In particular, in a high-damage world (but without climate catastrophes), adaptation becomes the preferred strategy and this is reflected in an increasing BCR. They note that most adaptation expenditures need to be carried out in developing countries, but that the size of the required resources is likely to be well beyond their absorptive capacity. Therefore, international cooperation is necessary to successfully transfer resources and adaptation technology to developing countries.

Samuel Fankhauser (Perspective paper 6.1) argues that adaptation is now unavoidable, because there are no realistic mitigation policies that restrict warming to a level that does not require substantial adaptation. He notes that it is made more difficult by uncertainty about the exact nature of the expected change, which puts a premium on adaptations that yield early benefits or increase the flexibility of systems to react to unexpected change. Frank Jotzo (chapter 6.2) notes that economic analysis of adaptation is subject to the same complications and limitations that beset quantitative economic analysis of climate change mitigation. There is a long road ahead in improving the tools for economic modeling of adaptation, and the mitigation–adaptation nexus, and in the meantime the crucial question for policy makers is whether and where specific adaptation actions are beneficial, what new policies are needed to support adaptive action, and what existing policies need to be changed or scrapped.

Isabel Galiana and Christopher Green (chapter 7) examine a technology-led approach to climate policy. They write that the rationales for this approach include the huge energy technology challenge to stabilizing climate; the lack of readiness or scalability of current carbon emission-free energy technologies; the energy-intensive nature of growth in populous developing countries, especially in Asia; the economic and political limitations of a carbon pricing-led policy; and the large economic cost of “brute force” mitigation policies.

Valentina Bosetti (Perspective paper 7.1) finds that combining R&D and climate policies might lead to efficiency gains and help contain climate policy costs. Bosetti also specifically focuses on analyzing the costs and benefits of research and development in CO2 capture and storage (CCS). This allows the continued use of fossil fuels while reducing the CO2 emissions produced and may therefore be hugely helpful, especially in countries like China and India, that heavily rely on coal for the generation of electricity. Although uncertainties are present when dealing with R&D investments, Bosetti finds that a program aiming at decreasing capturing costs or increasing the CO2 capture rate is shown to pass the cost-benefit (C/B) test, if a climate policy is in place.

Gregory Nemet (Perspective paper 7.2) agrees with Galiana and Green regarding the magnitude of the technological revolution required to address climate change, and the inability of on-the-shelf technologies to adequately fulfill the required technological change. Among other points, Nemet notes that a carbon price signal is insufficient to induce the technology development investments required to limit global temperature increase, and that the technology-led policy will shift the bulk of technological decision making from the private sector to the public sector.

Zili Yang (chapter 8) looks at technology transfer (TT): the process of sharing skills, knowledge, and technological breakthroughs among governments and other institutions to ensure that scientific and technological developments are accessible to a wider range of users. He finds that such transfers are an effective and necessary component when dealing with climate change, because international cooperation on both GHG mitigation and adaptation must involve transfer of technologies or dissemination of knowledge. David Popp (Perspective paper 8.1) critiques Yang's estimate of the potential of TT as a climate policy option, noting that Yang focuses on the direct gains from developed country financing of abatement in developing countries. Popp points out that there is an important secondary gain from TT – the potential for knowledge spillovers. He assesses the potential role that spillovers might play, and offers an assessment of the overall potential of international TT as a policy solution.

I believe that all of this research, in itself, provides a valuable contribution to and overview of today's discussions on global warming policy. But it is vital that we test and debate the experts’ recommendations, and identify the most attractive possibilities for policy makers to further explore. That is why the Copenhagen Consensus process goes beyond just gathering new research.

As in the Copenhagen Consensus 2004 and 2008 projects, an Expert Panel of economists – including three Nobel laureates – examined all of the research presented here. The five-strong Expert Panel for the Copenhagen Consensus on Climate engaged with all of the chapter and Perspective paper authors and came to their own conclusions about the merits of each suggested solution.

The Expert Panel discussed and debated all of the possibilities raised in the research, in sessions designed to promote free debate. They weighed up each solution that you will find in this book, and compared it to the other options. The Expert Panel was tasked with answering the question:

If the global community wants to spend up to, say, $250 billion per year over the next 10 years to diminish the adverse effects of climate changes, and to do most good for the world, which solutions would yield the greatest net benefits?

Later in the book, you will find their answers to that question, along with their individual explanations of how it was reached. They focused largely on estimates of costs and benefits, which is a transparent and practical way to show whether or not spending is worthwhile.

I invite you to read the research and the Expert Panel's findings, and form your own view on the best – and worst – ways we can respond to global warming. It is certainly time that we focused more on the solutions to this challenge.

Bibliography

Lomborg, B., 2001: The Skeptical Environmentalist: Measuring the Real State of the World, Cambridge University Press, Cambridge

Nordhaus, W.D., 2009: A Question of Balance: Weighing the Options on Global Warming Policies, Yale University Press, New Haven, CT




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