Download 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
Location
TOTAL
-40 a
C change
5b
5
-0.06
initila
After
CC After
tempraturre initial rent
adjustment After CC
adjustment
1
10
4
4
21.5
21.5
2
13
14.86
14.86
30.56
30.56
3
18
30.56
30.56
43.26
43.26
4
23
43.26
43.26
52.96
52.96
5
28
52.96
52.96
59.66
59.66
6
33
59.66
59.66
63.36
63.36
7
38
63.36
63.36
64.06
64.06
8
43
64.06
64.06
61.76
61.76
9
48
61.76
61.76
56.46
56.46
10
53
56.46
56.46
48.16
48.16
11
58
48.16
48.16
36.86
36.86
12
63
36.86
36.86
22.56
22.56
13
68
22.56
22.56
5.26
5.26
14
73
5.26
5.26
-15.04
0
15
78
-15.04
0
-38.34
0
16
83
-38.34
0
-64.64
0
563.78
566.42
constant
-40 a
C change
5b
20
-0.06
initila
After
CC After
Location
tempraturre initial rent
adjustment After CC
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
TOTAL
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
Annex 1 Countries (41)
Annex B
24 OECD
countries
EIT and others
17 Countries
(Russi an Feder ati on, Bal ti c
States, Centr al & Easter n
Eur opean States)
All subject to emission caps except the
EITs who hav e certain degree of
flexibility .
Hav e to prov ide financial and technical
assistance to dev eloping countries to help
meet their commitments.
Non-Annex 1 Countries (145)
Initially the G-7 7 , then
Central Asian countries
Mexico, S. Korea, Israel
Implement and update climate
change mitigation programs,
promote climate-friendly
technological dev elopment,
and report on emissions and
climate change policy .
Key Features of the Kyoto Protocol
• Legally binding emission caps for Annex I Countries
..
– fixed
fixed caps
caps on
on em
emission
ission lev
lev els,
els, allow
allowing
ing for
for som
somee growth
growth in
in som
somee cases
cases
–
– set
set by
by negotiation,
negotiation, not
not objectiv
objectiv ee cr
criteria
iteria
–
– historical
historical base
base yy ear
ear 11 990
990
–
– fiv
fiv e-y
e-y ear
ear com
comm
mitm
itment
ent period
period from
from 22008-2
008-201
01 22
–
– em
emission
ission of
of 66 greenhouse
greenhouse gases,
gases, plu
pluss CO
CO
absorptions from
from
certain land
land
–
certain
22 absorptions
use, land
land use
use change,
change, or
or forestry
forestry
use,
• Flexibility mechanisms
– international
international em
emissions
issions trading
trading
–
– joint
joint im
implem
plementation
entation
–
– Clean
Clean Dev
Dev elopm
elopment
ent Mechanism
Mechanism
–
• Accountability mechanisms
–m
measu
easurem
rement,
ent, recor
recording,
ding, rev
rev iew
iew of
of com
comm
mitm
itments
ents
–
– procedures
procedures for
for dealing
dealing with
with non-com
non-compliance,
pliance, as
as well
well as
as m
mandatory
andatory
–
consequences
ences for
for Annex
Annex II Countries
Countries
iolations.
consequ
’’ vv iolations.
Negotiations for Second
Commitment Phase
• Deeper Emission Cuts for Annex I Countries.
• Bringing in non-Annex I Countries.
• General Review of Protocol
BUT
There is a lack of consensus as to:
-how and who to include
- what to require
Conceptualizing the Problem
• Atmosphere as a global public good.
• Allocatable natural resource– could be drawn on
when necessary.
• Limited capacity to assimilate emissions.
• Scarcity – value of having temporary right to use
atmospheric commons.
Differentiating the Burden of Abatement
Objectiv e: Stabilizing atmospheric concentration of greenhouse gases, while
granting dev eloping countries sufficient room for emission growth to meet
their own dev elopment objectives and priorities.
•
•
•
•
Triptych Approach
Carbon Intensity
Convergence of Per Capita Emissions
Historical Responsibility
Triptych Approach
•
•
•
Initially used for differentiating costs within the EU bubble
Sector based: energy -intensiv e indu stry /power producing sector/other do
sectors
Partial allowances per country depending on distribution of sectors
Pros
Cons
4 Allows for differences in national 4 Hard to modify in light of newly
circumstances.
emerging science.
4 Makes a connection between
emission reduction targets and
policies and measures.
4 Allows emissions trading
4 Locks in fav orable treatment for
countries with heav y energy
industry sectors.
Carbon Intensity Approach
• Based on targets related to the carbon intensity of national economies
–
the amount of emissions produced per unit of GDP.
• Voluntary“intermediate” step for dev eloping countries.
Pros
Cons
4 Av oids the allocation problem s of
Ky oto.
4 Proportionately larger serv ice sector
not necessarily a redu ction in net
em issions.
4 No “hot air” underm ining Annex I
targets.
4 Does not im ply increased energy
efficiency .
4 Prov ides incentiv es for LDCs to take 4 Restricts tradable em ission perm its
on quantifiable targets.
to Annex I countries.
4 “Stopgap” option that puts off the
date for LDCs taking part.
4 Makes it hard to predict aggregate
lev el of global em issions.
Equal Per Capita Entitlements
•
•
•
Est a blish es a llow a ble lev el of g loba l em ission s, dist r ibu t ed equ a lly a m on g t h e
popu la t ion , ea c h c ou n t r y g et t in g a n en t it lem en t pr opor t ion a t e t o it s popu la t
Ult im a t e objec t iv e is t o c on v er t t o equ a l per c a pit a em ission s ov er a st ipu la t e
“C on t r a c t ion a n d C on v er g” en
t h ec ek ey elem en t s
Pros
Cons
4 Strong ethical basis.
4 Lim ited global acceptability .
4 Sim plicity of concept.
4 Concer ns about“hot air”
4 Offers incentiv es for dev eloping cou ntry4 Linkage with trading essential for
participation.
success.
4 Allows the LDCs to pu rsue dev elopm ent4 Fails to consider geographical/
goals w hile dev eloped countries reduce clim actic conditions or the structur e
em issions and LDCs grow.
of each econom y , i.e. cold clim ate,
hy dro power.
4 Enhancem ent of efficiency of global
trading.
Annual per capital CO2 emissions
(tons of C)
Beginning from the stroke of the new y ear, as they sit down to
their ev ening m eal on January 2, a US fam ily will hav e already
used, per person, the equiv alent in fossil fuels that a fam ily in
T anzania will depend on for the whole y ear.
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 rea
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
Sour ce: Car bon Di ox i de Inf or mati on and Anal y si s Center , http://
dev data.w or l dbank
.or g/data-quer y /
Per Capita Approach:
Winners and Losers
• Winners: Countries with large and growing
populations or with low emissions. (China, India,
Sub-Saharan Africa among LDCs, Japan, EU, France
)
• Losers: Oil-producing and/or more developed LDCs
(Singapore, UAE, Argentina, South Africa, US,
Russia)
Good Policy on Climate Change
• Considers:
– Scientific, political, ethical, economic factors
• Ensures
– Flexibility – trading permits
– Global participation
– Proper mechanisms to address non-compliance
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.