Transcript CLIMATE CHANGE

EEP-101-lecture 19
David Zilberman
Climate Change
Topics
 The Impacts of Climate Change on Agriculture
 How Climate Change Impacts Should Be
Addressed
 Policies to Delay and Dampen Climate Change
The Feasibility and Management of Sink
Activities
Direct impacts on agriculture
Movement of warmer climate from the
tropics to the Poles
Mexican climate will migrate to California.
California climate will migrate to Oregon.
Most of Texas and Oklahoma will become a
desert, and some areas in Canada will increase
in productivity.
Increased snow melt,flooding and changes of
volume and timing of irrigation water
Agriculture’s Response to climate change
Adaptation-farmers will change inputs use
and switch crops
Redesign and reconstruction of water
systems
Some areas near the tropics will be
deserted; some areas close to the Poles will
be farmed.
The net aggregate effect effect may not be
significant, but the regional effects may be
substantial.
Climate Change and Agriculture
Hot crop near equator,cold one near poles.
With CC movement to the pole,settlement close to
poles transition from cold to hot,desertification
Other impacts on agriculture
Fertilization effect: Higher levels of carbon
will increase yield.
Daylight effect: Moving north will reduce
exposure to the sun and reduce yield.
Pest effect: Warmer climate will lead to
northward movement of pest and reduce
yield.
Protein effect: Increase in carbon will lead to
higher yields but less protein production.
Methods for modeling climate change
 Hedonic Price (Richardian) Models
Impacts of climate
change will be reflected in asset values.
 Agro-economic models Agronomic estimates of CG
impacts on on yields and cost are used to simulate landuse output and prices
 Stochastic Simulations Consider impacts of estimated
changes in mean and variability of yields and profits
and land use
 Regional Case Studies Interdisciplinary--combine
quantitative estimates with expert interviews to assess
response to changes.
The Richardian model
Suppose Rent=-40
+5*temperature-.06*temperature squared
Climate change will increase temperature by
several degrees
We have a distribution of lands with different
initial temperatures
How will they be affected by climate
chagne?
constant
-4 0a
C change
5b
5
-0 .0 6
initila
A fter
C C A fter
Location
tempraturre initial rent adjustment A fter C C
adjustment
1
10
4
4
2 1 .5
2 1 .5
2
13
1 4 .8 6
1 4 .8 6
3 0 .5 6
3 0 .5 6
3
18
3 0 .5 6
3 0 .5 6
4 3 .2 6
4 3 .2 6
4
23
4 3 .2 6
4 3 .2 6
5 2 .9 6
5 2 .9 6
5
28
5 2 .9 6
5 2 .9 6
5 9 .6 6
5 9 .6 6
6
33
5 9 .6 6
5 9 .6 6
6 3 .3 6
6 3 .3 6
7
38
6 3 .3 6
6 3 .3 6
6 4 .0 6
6 4 .0 6
8
43
6 4 .0 6
6 4 .0 6
6 1 .7 6
6 1 .7 6
9
48
6 1 .7 6
6 1 .7 6
5 6 .4 6
5 6 .4 6
10
53
5 6 .4 6
5 6 .4 6
4 8 .1 6
4 8 .1 6
11
58
4 8 .1 6
4 8 .1 6
3 6 .8 6
3 6 .8 6
12
63
3 6 .8 6
3 6 .8 6
2 2 .5 6
2 2 .5 6
13
68
2 2 .5 6
2 2 .5 6
5 .2 6
5 .2 6
14
73
5 .2 6
5 .2 6
-1 5 .0 4
0
15
78
-1 5 .0 4
0
-3 8 .3 4
0
16
83
-3 8 .3 4
0
-6 4 .6 4
0
TO TAL
5 6 3 .7 8
5 6 6 .4 2
constant
-40a
C change
5b
20
-0.06
initila
A fter
C C A fter
Location
tempraturre initial rent adjustment A fter C C
adjustment
1
10
4
4
56
56
2
13
14.86
14.86
59.66
59.66
3
18
30.56
30.56
63.36
63.36
4
23
43.26
43.26
64.06
64.06
5
28
52.96
52.96
61.76
61.76
6
33
59.66
59.66
56.46
56.46
7
38
63.36
63.36
48.16
48.16
8
43
64.06
64.06
36.86
36.86
9
48
61.76
61.76
22.56
22.56
10
53
56.46
56.46
5.26
5.26
11
58
48.16
48.16
-15.04
0
12
63
36.86
36.86
-38.34
0
13
68
22.56
22.56
-64.64
0
14
73
5.26
5.26
-93.94
0
15
78
-15.04
0
-126.24
0
16
83
-38.34
0
-161.54
0
TO TAL
563.78
474.14
Problems of current impact models
 Food Prices reflect temporal market situations
– Currently there is excess supply of food.
– Future conditions depend on the race between population growth
and productivity growth
 Rents reflect commodity support and hide variability among
regions
 Models underemphasize pest, fertilization and similar
effects
 Models ignore transition and infrastructure costs-they
compares equilibria-but transition matters
 Under emphasize regional effects
Fertilization and Pest Effects
 Higher amounts of carbon in the atmosphere will
increase photosynthesis and plant productivity and
thus increase overall supply.
 The fertilization effects may be associated with less
production of protein.
 Pests will migrate with the warmer weather towards
the Poles, causing damage to trees.
 Overall, productivity may decline if the pest effect
is greater than the fertilization effect.
 There also will be high adjustment costs because
developing new crop systems is costly.
Transaction cost and uncertainty
 Uncertainty about timing of change is a major problemuncertainty deters action.
 Zoning and environmental regulations slow responses
 Adjusting farming system is time consuming&uncertain
 Flood control,rising water levels and relocation require
Slow and costly adjustments
 Adjustment costs increase as the change accelerates.
 CC increases vulnerability to crisis - draught disease
etc Quality of response is measured by ability to deal
with extreme situation
Shape and location matter
Pole
Winner
Loser
Equator
Poorer countries with lower adjustment capacity and
changing climate patterns will suffer most
Trade and aid will reduce effect of change
A Long-Term Perspective on Impact
Analysis
The impact of climate change depend on
population growth and technological change.
If population grows slower(faster) than food
productivity, CC impacts are less (more) severe
International arrangements to handle emergencies
and relocations will improve response to climate
change.
introduction of rapid assessment and response
institutions that will - design strategies
– develop and transfer technologies
– help developing countries with implementation
• Warming not globally uniform
• High-latitude amplification 
Albedo feedback
Global Climate Models used to project climate change
from different CO2 scenarios:
Business as
usual CO2
emission
Stabilization of
CO2
Control
Fuel efficiency comparsions
country
CO2/dollar GNP
Japan
France
UK
Germany
U.S
Canada
India
China
.25
.29
.35
.45
.55
.72
1.93
2.70
UN Framework Convention on
Climate Change
Ultimate objective: stabilizing greenhouse gas
concentrations in the atmosphere that would
prevent dangerous anthropogenic (humaninduced) interference with the climate system
Such a level should be achieved within a time
frame to allow ecosystems to adapt naturally to
climate change, to ensure that food production is
not threatened, and to enable economic
development to proceed in a sustainable manner
1988
Intergovernmental Panel on Climate Change (IPCC) estab.
1990
IPCC 1st Assessment Report  real threat that by mid 21st century human actions will
have changed the basic conditions that permit life
Intergov Negotiating Ctte (INC) estab.
1992
UN Framework Convention on Climate Change (UNFCCC) estab; “Earth Summit in
Rio de Janeiro; Convention open for signatures
1994
UNFCCC came into force: recognition that climate change is a real problem
1995
IPCC 2nd Assessment Report  evidence for human-induced climate change; estimate
“permissible emissions” to stabilize CO2 at 450 ppmv, 600 ppmv, ...; assessment of
impacts of climate change
1997
COP3: Kyoto Protocol; developed countries to reduce their collective emissions of 6
GHG’s (from 1990 levels) by at least 5% by 2008-2012
1998
Kyoto Protocol open for signatures; 84 obtained in one year
2001
IPCC 3rd Assessment Report  more evidence for human-induced climate change
2002
World Summit on Sustainable Development; Johannesburg
Parties to the Kyoto Protocol
A nnex 1 Cou nt r i es (41 )
A nnex B
24 OECD
c ou nt r i es
EIT and ot her s
1 7 Cou nt r i es
(Russian Federation, Baltic
States, Central & Eastern
European States)
N on-A nnex 1 Cou nt r i es (1 45)
Ini t i al l y t h e G-7 7 , t hen
Cent r al A si an c ou nt r i es
Mex i c o, S. Kor ea, Isr ael
A l l su b jec t t o emi ssi on c ap s ex c ep t t he
Imp l ement and u p dat e c l i mat e
EITs w ho h av e c er t ai n degr ee of
c h ange mi t i gat i on p r ogr ams,
f l ex i b i l i t y .
p r omot e c l i mat e-f r i endl y
ec hnol ogi c al dev el opment ,
Hav e t o p r ov i de f i nanc i al and t ec hni ctal
and
assi st anc e t o dev el opi ng c ou nt r i es t o hel
p r ep or t on emi ssi ons and
c l i mat e c hange p ol i c y .
meet t hei r c ommi t ment s.
Key Features of the Kyoto Protocol
Leggaally
lly bind
binding
ing em
em is
is ss ion
ion ccaappss for
for Anne
Annexx II Cou
Cou.ntries
ntries
• Le
– fixed
fixed caps
caps on
on emission
emission levels,
levels, allowing
allowing for
for some
some growth
growth in
in some
some cases
cases
–
– set
set by
by negotiation,
negotiation, not
not objective
objective criteria
criteria
–
– historical
historical base
base year
year 1990
1990
–
– five-year
five-year commitment
commitment period
period from
from 2008-2012
2008-2012
–
– emission
emission of
of 66 greenhouse
greenhouse gases,
gases, plus
plus CO
CO22 absorptions
absorptions from
from
certain land
land
–
certain
use, land
land use
use change,
change, or
or forestry
forestry
use,
• Flexibility
Flexibility m
m ec
echhaanis
nis m
m ss
– international
international emissions
emissions trading
trading
–
– joint
joint implementation
implementation
–
– Clean
Clean Development
Development Mechanism
Mechanism
–
Acccou
ounta
ntability
bility m
m ec
echhaanis
nis m
m ss
• Ac
– measurement,
measurement, recording,
recording, review
review of
of commitments
commitments
–
– procedures
procedures for
for dealing
dealing with
with non-compliance,
non-compliance, as
as well
well as
as mandatory
mandatory
–
consequences for
for Annex
Annex II Countries’
Countries’ violations.
violations.
consequences
Negotiations for Second
Commitment Phase
• Deeper Emission Cuts for Annex I Countries.
• Bringing in non-Annex I Countries.
• General Review of Protocol
BUT
T h er e i s a l a ck of con sen su s a s t o:
-h ow a n d wh o t o i n cl u d e
- wh a t t o r equ i r e
Conceptualizing the Problem
• Atmosphere as a global public good.
• Allocatablenatural resource– could be drawn on
when necessary .
• Limited capacity to assimilate emissions.
• Scarcity– v alue of hav ing temporary right to use
atmospheric commons.
Differentiating the Burden of Abatement
Ob ject i v e:St ab i l i zi ng at mosp her i c c onc ent r at i on of gr eenhou se gases
gr ant i ng dev el op i ng c ou nt r i es su f f i c i ent r oom f or emi ssi on gr ow t h t
t h ei r ow n devel op ment ob jec t iv es and p r i or i t ies.
•
•
•
•
Triptych Approach
Carbon Intensity
Convergence of Per Capita Emissions
Historical Responsibility
T riptych Approach
•
•
•
Initially used for differentiating costs within the EU bubble
Sector based: energy-intensive industry/power producing sector/other domesti
sectors
Partial allowances per country depending on distribution of sectors
Pros
Cons
4 A l l ow s f or di f f er en c es i n nat i on
4 H
al ar d t o modi f y i n l i gh t of new
c i r c u mst anc es.
emer gi n g sc i en c e.
4 Mak es a c on nec t i on b et w een 4 Loc k s i n f av or ab l e t r eat ment
emi ssi on r edu c t i on t ar get s an d c ou nt r i es w i t h heav y ener gy
p ol i c i es and measu r es.
i n du st r y sec tor s.
4 A l l ow s emi ssi ons t r adi ng
Carbon Intensity Approach
• Based on t ar get s r el at ed t o t h e c ar b on i nt ensi t y of nat i onal ec–ono
t h e amou nt of emi ssi ons p r odu c ed p er u ni t of GDP.
• V ol u nt ar “i
y nt er medi at” est ep f or devel op i ng c ou nt r i es.
Pros
Cons
4 Avoids the allocation problems of
Kyoto.
4 Proportionately larger service sector
not necessarily a reduction in net
emissions.
4 No “hot air” undermining Annex I
targets.
4 Does not imply increased energy
efficiency.
4 Provides incentives for LDCs to take
on quantifiable targets.
4 Restricts tradable emission permits
to Annex I countries.
4 “Stopgap” option that puts off the
date for LDCs taking part.
4 Makes it hard to predict aggregate
level of global emissions.
Equal Per Capita Entitlements
•
•
•
Establishes allowable level of global emissions, distributed equally among the global
population, each country getting an entitlement proportionate to its population.
Ultimate objective is to convert to equal per capita emissions over a stipulated time.
“Contraction and Convergence” the key elements
Pr os
Con s
4 Strong ethical basis.
4 Limited global acceptability.
4 Simplicity of concept.
4 Concerns about “hot air”
4 Offers incentives for developing country 4 Linkage with trading essential for
participation.
success.
4 Allows the LDCs to pursue development
goals while developed countries reduce
emissions and LDCs grow.
4 Enhancement of efficiency of global
trading.
4 Fails to consider geographical/
climactic conditions or the structure
of each economy, i.e. cold climate,
hydro power.
Annual per capital CO2 emissions
(tons of C)
Be ginning from the stroke of the ne w y e ar, as the y sit down to
the ir e v e ning me al on January 2, a US family will hav e alre ady
use d, pe r pe rson, the e quiv ale nt in fossil fue ls that a family in
T anzania will de pe nd on for the whole y e ar.
6
5
4
3
2
1
0
sh
de
la
ng
Ba ia
er
ig
N
a
di
In l
i
az
Br
a
in
g
Ch Av
ld
or
W ea
r
Ko
S.
EU ica
r
Af
S.
n
d
pa Fe
Ja an
a
i
ss abi
Ru Ar
i
ud
Sa alia
r
st
Au
S
U
Source: Carbon Dioxide Information and Analysis Center, http://
devdata .worldbank .org/data-query/
Per Capita Approach:
Winners and Losers
• W in n er s: C ou n t r ies w it h la r g e a n d g r ow in g
popu la t ion s or w it h low em ission s. ( C h in a , In dia ,
Su b -Sa h a r a n A fr ic a a m on g LDC s, Ja pa n , EU , Fr a
)
• Loser s: O il-p r odu c in g a n d/or m or e dev eloped LDC
(S in g a por e, UA E, A r g en t in a , S ou t h A fr ic a , U S ,
Ru ssia )
Good Policy on Climate Change
• Considers:
– S c ien t ific , p olit ic a l, et h ic a l, ec on om ic fa c t or s
• Ensures
– Fl ex ib ilit–y t r a d in g p er m it s
– G lob a l pa r t ic ip a t ion
– Pr op er m ec h a n ism s t o a d dr ess n on -c om p lia n c e
Principles of Climate Change Policies
Incentives to develop capacity to deal with CC
• Emphasis on increased R&D to develop resourceconserving technologies and improved monitoring
technologies.
• Emphasis on adaptive management.
• Framework for relocation and resettlement.
• Emphasis on cost effective policies aimed to delay
climate change.
• No regret policies.
The Kyoto Protocol I
 A framework to reduce global greenhouse gases:
• Signing is voluntary.
• Enters into force when ratified by 55 countries.
• Signatories establish an upper bound on greenhouse gas emissions based
on their 1990 emissions
– The U.S. target is –7% of 1990 emissions.
– Japan’s target is –6% of 1990 emissions.
– EU target is –8% of 1990 emissions.
– Russian and Ukrainian target is no reduction from 1990 emission
level. Since the economies of these countries collapsed, their
emissions are smaller than in 1990s. They have “hot air” that they
can fill or sell.
– Costa Rica and Argentina and some Atlantic Ocean island countries
are the only developing countries to sign the Kyoto Protocol.
The Kyoto Protocol II
Many developing countries oppose it for several
reasons.
– Some see it as “new colonialism.” They have not
caused the mess and should not be pay to repair it
– They want criteria for emission limits that is more
favorable to lesser developed countries. For example:
Nation’s emissions limits are proportional to population.
National emission limits are based on a formula that
combines 1990 emission base and population size.
Elements of Kyoto
Nations have sovereignty for domestic
implementation
Joint implementation projects in countries that
sign the agreement. Such projects may enable
countries to invest in low-cost, emissionreduction activities or provide a foundation for
trading.
Clean Development Mechanisms (CDMs) are
emission reduction projects in LDCs that will
provide credit to the developed nations that
finance them.
Banking and Bubles
• “Banking” is allowed but is limited to next
period and restricted.
• Countries may form “bubbles” to combine
their targets. The United States and Russia
may form a bubble. The US may pay Russia
tens of billions of dollars for its “hot air.”
The Management of Sink
Activities-soil carbon
 Can help in gaining time
 Are subject to uncertainty in terms of impact and
measurement
 Issues of enforcements of contracts to modify behavior
permanently.
 Decide whether voluntary or mandatory program
(voluntary open to abuse)
Monitoring of sink activities is difficult. Carbon flow
measurement is impossible--need to measure proxies.
Pay based on crop and technique selection
Contribution depends on past activities-need base line
measurement
Payment schemes
 1.Pay as you go-based on action and past activities -
including penalties for emissions
 2.Long term contracts- pay for a commitment to sequester a
target level within a specific period- enforcement is tricky
 3.Pay for conservation activities regardless of
sequestration.
Establishment efficient institutional set up– regional aggregators that will buy from farmers and sell
to market
– A monitoring body-to oversee aggregators
– An exchange &clearing house
Sequestration is not a panacea
Payment for carbon will be low ($1-10/ton,net to
farmer even smaller )
Limit on contribution per acre (5-10 tons)
Joining program will restrict flexibility
Is useful on marginal land when contributes to other
activities
May entail paybacks to “buy” emission rights
Kyoto for biotech
Europe will be more accepting of use of GMO
U.S. Will be more receptive to Kyoto.