Download What is the nature of specific land use problems

7.
Global Warming, Uncertainty,
Irreversibility & LongTerm
Policymaking
(SPRING 2006)
Larry D. Sanders
Dept. of Ag Economics
Oklahoma State University
1
INTRODUCTION
(ch. 10 Hackett; other sources)
 Purpose:
– to become aware of the concept of uncertainty & irreversibility
with respect to environmental & natural resource policies
 Learning
1.
2.
3.
4.
Objectives. To understand/become aware of:
To understand uncertainty & irreversibility.
To become aware of the issue of global warming.
To consider the policy options with respect to
possibly irreversible actions/events such as global
warming.
To provide natural resource managers with tools to apply to
the climate change issue
2
Background on concepts
 Risk—the
measurable probability of an event occurring
and the significance of the consequence of the occurrence
(flood, life expectancy w/adverse behavior)
 Uncertainty--the likelihood that some event/action will or
will not occur is indefinite or not measurable, perhaps with
conditions such as time frame (death, species extinction,
terrorist attack)
 Irreversibility--suggests that some action/event will
transform a resource to the extent it cannot be returned to
its original state (or cost is prohibitively high), limiting
future options
– clear-cutting a forest; draining a wetland; damming a river
– urbanizing former farmland (blacktop, residences, businesses)
3
Risk Perceptions: may vary w/knowledge,
severity of result, whether individual choice . . .
A: not observable, unknown
to exposed, effect delayed,
new risk, risk unknown to
science
Unknown Risk
A
x
Desire for
regulation
Nitrogen
x
Nitrites
Fertilizers
x Radioactive
x Pesticides
x
Minor
Risk D
Lead
Caffeine
x
DDT
B Severe
X
x
x
Global
warming/ Risk
climate change
Smoking
boarding
Adapted from Carlson et al.
Agricultural & Environmental Resource
Economics, 1993; also Sanders
x
Paint
Skate- x
D: controllable, not dread,
not global catastrophe, not
fatal, equitable, individual,
low risk to future gen., easily
reduced, risk decreasing,
voluntary
Waste
x Nuclear War
Rec.
x Commercial Flying
Boating
x
Handguns
C
Known
Risk
C: Observable, known to
exposed, effect immediate,
old risk, risk known to
science
B: uncontrollable, dread,
global catastrophe, fatal,
not equitable, hi risk to
future generations
4
Economic Questions for Natural Resource/Environment
Managers Considering Climate Change
 What
factors are within my ability to control and
manage?
 Can risk be insured?
 Can/should government act/intervene (& at what level;
& should it be coordinated)?
 Can I estimate the range of benefits and costs, adjusted
for probability of occurrence of realistic range of likely
events? (consider supply & demand factors)
 Is the downside risk negligible (and therefore not
worthy of private concern), or significant?
 Are there contingent adjustments that could be planned
for and reasonably made if necessary?
5
Case Study: Global Warming/Climate
Change--background
 Greenhouse
gases--carbon dioxide,
chlorofluorocarbons, methane, nitrous oxide,
ozone, hydrofluorocarbons, perfluorinated
carbons
 Their function--filter solar energy, limiting
infrared energy radiated back in to space
 Greenhouse effect--as greenhouse gas
concentration increases, capturing of infrared
energy increases, & temperatures are likely to
rise
6
7
Global Warming/Climate Change—
background (cont)
 The
common ground in the debate is that this is
likely a natural and cyclical process
 The points of departure/disagreement:
– What does global warming mean?
» Warming? How soon? How severe?
» More erratic fluctuations in weather (warming, cooling,
increased incidence in & severity of storms)? How soon?
How severe?
– Is human activity worsening the natural & cyclical
process?
» How significant? How fast?
8
The Debate over Global Warming
 "Global
warming is
'the greatest hoax ever
perpetrated on the
American people.”
– Sen. James Inhofe
(R-Okla)

The mainstream scientific
consensus on global warming
is becoming clearer every
day: changes in our climate
are real and they are
underway. Now. . . . The
evidence that human-induced
global warming is real is
increasingly clear and
compelling.
– Union of
Concerned
Scientists
9
The Debate over Global Warming
“That an elected official would call
global warming a ‘hoax’ borders
on the criminal . . .”
--Barry Lopez, nature writer, 2005.
10
Global Warming:
Is it real?
“Greenland's glaciers are
melting into the sea twice
as fast as previously
believed, the result of a
warming trend that renders
obsolete predictions of
how quickly Earth's
oceans will rise over the
next century, scientists
said yesterday.” (17 Feb
06, The Washington Post)
11
Global Warming:
What Scientists Say
“Most climate scientists believe a major cause for
Earth's warming climate is increased emissions of
greenhouse gases as a result of burning fossil
fuels, largely in the United States and other
wealthy, industrialized nations such as those of
western Europe but increasingly in rapidly
developing nations such as China and India as
well. Carbon dioxide and several other gases trap
the sun's heat and raise atmospheric temperature.”
(17 Feb 06, The Washington Post)
12
Global Warming & Agriculture
 Possible
benefits:
– Enhanced CO2 assimilation
– Longer growing seasons
– Increased precipitation
 Possible
costs:
– More frequent & severe droughts with heat stress
– Faster growth, shorter growing periods, shortened
lifecycle
– Sea-level rise; increased flooding & salinization
Consequences Vol. 1, No. 2, Summer 1995, US Global Change Research Information Office.
13
The Importance of Greenhouse Gases
 Provides
a blanket that “insulates the Earth
by trapping heat, a lot like panes of glass in
a greenhouse. . . ‘part of what makes the
planet of work’.
 “Without greenhouse gases, the Earth would
be much too cold for comfort . . . problem
now is that humans are thickening the
blanket . . . & . . . nature’s thermostat is
nudged up.”
--From cnn.com special section on global warming article “Messing with the
thermostat can be devastating”, Miles O’Obrien, November 27, 1997.
14
Recent US Ag Situation related to weather
(since 1970s)
 Enhanced
productivity, higher variability in crop
yields, prices, farm income
 Extreme weather events resulted in severe crop
damage & economic loss ($56 b. in ’88)
 Increased pest damage & pesticide use
 Ranges of several crop pests expanded
 Greater prevalence of crop pests
15
Potential Impacts to Agriculture
 Increase
in CO2 increases water use
efficiency of plants, resulting in
decreased water requirements & yield
loss due to water stress
 Increasing global temp decreases
agricultural production 0.5-1.3%,
resulting in increased grazing lands and
some increase in livestock production
16
Potential Impacts to Agriculture
 Impacts
–
–
–
–
–
geographically distributed
SE Asia crop production down 2.6-4.8%
Japan up 6.2-10.4%
US crop production varies
US ag income down 10.9%
US prices down 5.1%
 Increase
in insects, molds
17
Potential Climate Change Effects on US Ag
 Expected
temperature increases likely to speed
maturation of annual crop plants, reducing yield
potential; extreme hi temps may cause more
severe crop losses
 Increase in floods and droughts; variability of
precipitation increases instability, resulting in
risk to crops and livestock and management
planning more difficult
 Higher temps and precipitation likely to increase
spread of pests and diseases
18
Potential Climate Change Effects on US Ag
(cont)
 Increased
crop pests likely to increase chemical use,
possibly increasing health, environmental & economic
risks
 Increased incidence of weeds and invasive species,
resulting in increased chemical use and economic cost;
possibly increasing health, environmental & economic
risks
 Shift the ranges of optimal production centers for
specific crops; could reduce US comparative advantage
in ag commodities for export
 All of this occurring in a more volatile political world,
with possible military adventurism
19
Direct effects of increasing atmospheric CO2 on
agriculture production
8
6.5
6
% CHANGE
4
3.6
2.4
2.4
2
0.8 0.2
0
-2
wheat
-1.3
other grains
nongrains
livestock
WORLD
US
-4
-6
-5.6
-8
COMMODITIES
NOTE: estimates based on 225-ppmv increase in atmospheric concentration of CO2 when
applied to climatic & economic conditions 1990 (ERS-USDA)
20
Major Contributors to Greenhouse Gases
Per Capita Energy
World CO2
Country Emissions (%) Consumption (mil. Btu) Emission (%)
US
19
335
23.8
China
10
13.6
Japan
5
171
5.0
Brazil
4
33
1.3
Germany
4
3.6
India
4
4.6
UK
2
169
2.4
Indonesia
2
1.0
Italy
2
1.8
Russia
6.7
21
The Claims about Global Warming:
“It’s Real”





Sea level will rise 2-3 feet,
covering many islands,
changing coast lines &
contaminating water supplies
Southern US climate becomes
tropical changing ag
production
Northern US climate
moderates, more like Southern
US today
Increase in heat-related
deaths/diseases (malaria,
dengue fever)
Political crises, volatility could
increase
“Skeptical”





Only 24% of public is
concerned
Models under-estimate
complex global ecosystem
(can’t predict 7 days out,
much less years)
Models under-estimate the
“technological fix” &
market economics
Doubtful that government
intervention will do
anything but create more
immediate problems
Let the market & private
property rights manage the
situation
22
ATMOSPHERIC FORCING FACTORS
Epstein
23
Global Temperature: the Past 20,000 Years, & the Next 100 Years
3
Av. temp. over past 10,000 years =15 ºC
IPCC (2001) forecast:
+ 1.4-5.8oC, with band
of uncertainty
Mesopotamia
flourishes Vikings in
Agriculture
emerges
1
Greenland
Black
Deat
0
Holocene
h
Temp.
Optimum Medieval
Warm Little Ice
change (ºC)
Age in Europe
-2
(15th-18th
centuries)
of
-3 End
last
ice age
Younger
-4
Dryas
2
1940
21st
century:
rapid
rise
-5
20,000 10,000 2,000
Epstein
1,000
300
100
Now
+100
24
Case Study:

Global Warming
--Science in Conflict
Scientists continue to debate:
1. whether global warming is in fact occurring, &
2. the level of severity of impact
3. Are causes natural, man-made or both?

Trade-offs—Is our action or inaction irreversible?
1. If worst-case predictions are true & nothing done to stop it, largescale changes in global climate that will severely affect the planet
& our geo-political-economic system; inaction is generally
irreversible.
2. If predictions are not true, or wildly over-stated but actions are
taken to minimize global warming (Kyoto Agreement), widescale economic impacts on the US will reduce competitiveness
(30-50% increase in fuel & utility bills; loss of economic gains);
action is reversible, but cost of action and cost of reversal could
25
be high.
What the data say:
 “The
concentration of CO2 in Earth’s atmosphere is
now higher than at any time in the past 400,000 years,
and the rate of increase is accelerating.”*
 “Climate change already claims more lives annually
than terrorism does: . . . Perhaps 160,000 people die
each year due to the ancillary effects of climate
change, such as malaria and malnutrition.”**
 Current trends suggest:
– the Arctic Ice Cap could be gone by 2060
– Glacier National Park (Montana) could be “glacier-less” by
2020
* Worldwatch Institute, p.112.
** Worldwatch Institute, p. 113.
26
Recent studies:
“…although climate models will always be improving, there are
certain changes we can already predict with a level of confidence.
First, most studies indicate . . . more droughts and more floods,
more variable and more extreme rainfall. Second, . . . Longer
growing seasons mean more generations of pests . . . . Third,
climate change will hit farmers in the developing world hardest.”*
“. . . Estimates that grain yields in the tropics might fall as much as
30 percent over the next 50 years—a period when the region’s
already malnourished population will increase by 44 percent.”**
“… the wheat-growing prairies of Canada and the Great Plains of
the United States would eventually no longer produce enough
food to support their populations if nothing were done to fight
climate change.”**
*
Worldwatch, p. 73.; **
Worldwatch, p. 72.
27
Global Warming as an Externality
 Global
warming may be viewed as an open access or
common property problem*
– All hold the right to pollute the atmosphere.
– No one can be excluded and nobody can charge anybody else
for the right to emit greenhouse gases.
 Whether
costs are negligible or uncertain or potentially
high, potential for problems still real because of absence
of property rights
– Distributional issues are significant; those who create problem
may not suffer the costs
– Alternatively, costs of reducing production of gases may lead to
significant economic losses
*Ancev, T. (2002)
28
If Global Warming Perceived as Market
Failure
Price
MCs
MCp
P2
P1
Q2 Q1
MBp=MBs
Quantity (production;
Development)
Consider govt intervention such as a Pigouvian
tax to shift to a production or development level
that reduces human-caused factors that contribute
to global warming; ex: carbon tax
29
If/when Global Warming begins to have
serious impacts?
 More
severe weather likely in Europe soon because of
decline in force of North Atlantic Current
– The “Great Ocean Conveyor” controls climate for Northern
Hemisphere, and possibly the world by transporting heat
throughout the world oceans
– Cold, salty denser waters sink, pulls warm, salty Gulf Stream
waters north
– Heat transferred to atmosphere above N. Atlantic, prevailing winds
carry heat east to warm Europe
 What
to monitor if global warming impacts the Conveyor
– Look for water temp drops of 10-30 degrees (Grand Banks buoy)
– Arctic air surface temps rising to 40-50 degrees in autumn/15-30
degrees in winter (Barrow, AK; polar ice cap melt)
30
– Upper atmosphere temps drop
Deep Ocean Warming
Levitus et al. Science 2000; 287: 2225
31
FRESHENING
OF THE ARCTIC
Hoerling and Kumar: Science 2003 January 31; 299: 691-694
32
If/when Global Warming begins to have
serious impacts? (continued)
 Sudden
climate change, exhibited in locally severe
weather & shifts in regional weather patterns
– Local weather storms more violent
– Western Europe becomes more like Canada with shorter
growing seasons
– Summer pollution events more significant (hotter temps & less
air movement)
– Coastal areas will be inundated
– Fish/bird species habitats will be harmed
– Likely increased incidence in communicable disease, pests
– Political/military conflict to control natural resources &
environmental assets
– Ocean damage could be severe
 The
cost of uncertainty and flux in weather could be high
33
Global Warming & Oceans
 Medicine
from the sea could be at risk
– Includes compounds for chronic pain, Alzheimer’s,
Schizophrenia, cancer, inflammation, asthma
 Ocean
food sources could be at risk
– 16% of global animal protein comes from sea
– The sea is Asia’s primary source of protein
– Omega-3s from fish help protect against heart
disease
– If unchecked, US percapita consumption of seafood
likely to rise to 16 pounds by 2020
34
Debate continues on what occurs next:
Global warming or Global Cooling?



Continued warming & associated impacts for extended period
– Look 200-500 miles south to see what your weather will look
like
– Perhaps more weather volatility
OR
Snap into global cooling
– Warming melts glaciers
– Fresh water causes current to slow, then stop
– Extended droughts and intense rain/snow storms
– Leads to ice age or superstorm period
“Look 500 miles north if you want to see what your weather will
look like.” H. Willis
Again, the cost of uncertainty and fluctuations could be high
35
EXTREME WEATHER EVENTS &
DISEASE CLUSTERS
Epstein
36
Epstein
37
Costs of Extreme Weather Events
Insurance & Reinsurance, FEMA, OFDA, NGOs, Nation States, Companies
UNEP
Epstein
$150b/yr w/in this decade
38
39
Agriculture’s Impact on Climate Change:
 Contribute to emissions directly from:
– Deforestation
– Biomass burning
– Ruminant animals cause methane (may be the major driver of greenhouse
gases
– Decomposition of soil organic carbon from tillage practices (plowing is
major cause of CO2 emissions from cropland)
– Rice cultivation
– Fertilizer application
– Use of manure
– Degradation/elimination of wetlands
 Indirect
factors account for most ag emissions:
– Nitrous oxides/other gases from concentrated livestock
operations
– Microbial activities in soil/water after fertilizer/manure
application
40
Agriculture’s Impact on Climate Change:
management response
 Carbon
sequestration
– Reducing emissions or taking CO2 out of
atmosphere & storing in terrestrial, oceanic or
freshwater aquatic ecosystems
– Carbon sink is process/activity that removes
greenhouse gas from atmosphere
– Restore degraded soils, adopt soil conservation
(minimum tillage), grow plants/trees with longer life
cycle
41
Economic Impacts of Carbon Charges
 Goal:
Decrease US greenhouse gas emissions to
1990 levels, minus 7% by 2010
– Not yet approved by US
 Alternative
charges:
– $14/mt: modest impact
» Producer, consumer surplus down less than 0.5%
» Price increases and production declines less than 1%
– $100 & $200: more significant impacts
– Others suggest gas/diesel be carbon taxed at the
pump
42
The Kyoto Accords and Global Warming
 Much
of the world absent the US has
agreed to slow/scale back generation of
greenhouse gases
 Carbon targets and trading are key in this
process
 Agriculture is a tool to assist in carbon
storing & reduction
43
Economic Questions for Natural Resource/Environment
Managers Considering Climate Change
 What
factors are within my ability to control and
manage?
 Can risk be insured?
 Can/should government act/intervene (& at what level;
& should it be coordinated)?
 Can I estimate the range of benefits and costs, adjusted
for probability of occurrence of realistic range of likely
events? (consider supply & demand factors)
 Is the downside risk negligible (and therefore not
worthy of private concern), or significant?
 Are there contingent adjustments that could be planned
for and reasonably made if necessary?
44
Choices: Individual or Public Response?
 Individual
response
– Appropriate if property rights are clear, the market is
functioning effectively & impacts are internal
 Public
response
– Appropriate if property rights not clear, the market
isn’t functioning effectively & some impacts are
external
 The
current evidence suggests a public response
is necessary
45
Climate Change Public Policy Options
 Alternatives
for limited protective response to help the
market function
– Assist development/management of hypothetical trading
markets
– Subsidize carbon storing
» No-tillage
» Tree production
» Wetlands protection
– Impose a carbon tax
– Provide tax credits for alternatives that produce less
greenhouse gas
– Fund research & development
46
Climate Change Public Policy Options (cont)
 Alternatives
for expansive protective response
because the market is part of the problem,
especially with limited time & irreversibility
– Command & control
» Strong restrictions with heavy fines & penalties to
proscribe/prescribe specific individual, group & business
behavior
» Nationalization of energy production, especially utilities
» Confiscation of carbon producing equipment/activities
» Martial law if/when abrupt climate change begins to occur
» Loss of democratic & market freedom
47
Climate Change Risks Affecting Agriculture
Do producers have the ability to manage this risk?
If not, can/will the market respond?
If not, can/will government intervene?
 Extreme event risks
– Tendency for more days of extreme heat/cold, heavy
precip/long droughts
 Field-time
availability risks
– Extreme weather affects timing of field operations
 Yield
risks
– Extreme weather reduces crop yields
48
Climate Change Risks Affecting Agriculture
(continued)
 Technology
adoption risks
– New technology may be a management response to
climate change; may not perform as expected
(untested or operator inexperience)
 Interactions
between risk factors
– Risks not likely to occur individually and isolated,
but multiple at same time
 Policy
risks
– Public policy may accentuate problems or be a
disincentive for managers to change
49
Some tools/options now available
 Agriculture
– Government-subsidized crop insurance
– Government-subsidized conservation programs
– Government-funded research, development &
education
– Futures markets
– Conservation tillage
– Organic farming
– Holistic farm management
50
“Urgent, urgent, emergency”? Or
“Much ado about nothing”?
 So,
will it be a long, slow slide with time
and opportunity for a technical solution?
 Or, will there be an abrupt change with a
failure of technology, leading devastation?
 Or, is the truth yet to be determined &
somewhere in between?
 How government responds will be one of
the most significant policy decisions of the
21st century
51
Issues & Options with Global Warming
and Global Climate Change
 Key
Issues:
–
–
–
–
–
–
Time Perspective?
Sources?
Geography (Trans-national?)
Irreversibility?
Science?
The erratic pattern & severity
of weather fluctuations
– Distribution of benefits & costs
 Free
Market
 Research/Development/Extension
 Regulation: Local? National? Regional? Global?
 Subsidies/Incentives/Taxes/Fines
52
Other Sources
Ancev, T. “Global Warming and Global Institutions: How Are They Related”,
unpublished monograph, December 2002, Oklahoma State University.
Bell, A. & Strieber, W. The Coming Global Superstorm, Pocket Books, 2000.
Carlson et al. Agricultural & Environmental Resource Economics, 1993.
Center for Health and Global Environment, Harvard Medical School, “Healthy
Oceans, Healthy Humans”, 2000.
CNN: http://cnn.com/TECH (see interactive features; see global warming 101)
DEOS: “Current Velocities of the Gulf Stream”: http://rads.tudelft.nl/gulfstream/
Epstein, Paul R., “Climate Change and Public Health”, Center for Health and Global
Environment, Harvard Medical School, 2000.
Joyce, T. & Keigwin, L. “Are We on the Brink of a New Little Ice Age?”, Woods
Hole Oceanographic Institute,
http://www.whoi.edu/institutes/occi/abruptclimate_joyce_keigwin.html
Knight, F. H. Risk, Uncertainty, and Profit, 1921.
Lopez, B. private conversations after OSU speech, 24 Feb 05. Various publications.
53
Other Sources (continued)
NASA & associated projects:
http://www.ghcc.msfc.nasa.gov/MSU/msusci.html
Oklahoma Climatological Survey, 2005.
Union of Concerned Scientists,
http://www.ucsusa.org/global_environment/global_warming/index.cfm
USDA, various sources.
The Washington Post
Willis, H. Earth’s Future Climate, Llumina Press, 2000.
The Worldwatch Institute. State of the World 2005: Redefining Global Security .
WW Norton, 2005.
Woods Hole Oceanographic Institution; Ocean and Climate Change Institute:
http://www.whoi.edu/institutes/occi/currenttopics/climatechange_wef.html
Graphic review of global warming:
http://www.solcomhouse.com/globalwarming.htm
54