Valuing Climate Change: The Economics of the GreenhouseWithin only a few years, global warming has emerged from scientific speculation into an environmental threat of worldwide concern. Yet the scientific community remains uncertain as to the long-term trends and effects of climate change, and this uncertainty has been seized on as justification for inaction by an international community reluctant to bear the costs of policies to reduce greenhouse gas emissions. Valuing Climate Change presents concrete, economic evidence of the need for action. Fankhauser assesses the costs of a doubling of GHG emissions to be a significant percentage of gross world product; a figure which he then compares to the costs of reducing emissions. In his comparison, he looks at regional as well as global estimates of damage, and takes account of the non-climate change benefits of GHG reductions, such as a switch in the energy sector to cleaner technologies or renewable fuels, and the impacts on transport, with reduced congestion and improved air quality. It is clear that the stakes are high, and Fankhauser believes that tougher targets may be needed than those set out in the Framework Convention on Climate Change. He assesses the optimum policy responses to GHG reduction, the likely instruments for achieving it and the potential for international cooperation in dealing with the problems. This is a major contribution to the rapidly changing debate on global warming. |
Contents
Economics and Climate Change | 3 |
Outline and Summary | 10 |
1 | 16 |
2 | 22 |
The Economic Costs of CO₂ Concentration Doubling 27 | 27 |
1 | 29 |
2 | 51 |
The Marginal Social Costs per Unit Emitted | 58 |
The Costs of Greenhouse Gas Abatement | 95 |
Policy Instruments and Carbon Tax | 107 |
Discounting | 115 |
1 | 116 |
The Optimal Policy Response to Global Warming | 121 |
1 | 125 |
International Cooperation | 132 |
TABLES | 139 |
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Common terms and phrases
2xCO₂ abatement costs adaptation agricultural air pollution analysis areas assessment assume assumption average carbon abatement Carbon Emission carbon leakage carbon tax cent of GNP Chapter China Climate Change Cline CO₂ CO2 emissions concentration cost-benefit costs of greenhouse damage costs damage function developing countries discount rate distribution double dividend dryland loss East Anglia Economic ecosystems efficiency emission stabilization energy Environmental equilibrium Ex-USSR example Fankhauser figures future gases Global Environment greenhouse damage Greenhouse Effect greenhouse gas abatement greenhouse gas emissions higher impact events impacts income increase IPCC joint implementation m/kmē Manne and Richels marginal measures non-market Nordhaus OECD OECD countries parameters Pearce Peck and Teisberg policy response predictions probability protection costs radiative forcing rate of discount reduction regions scenario sea level rise secondary benefits sector social costs social rate studies Table temperature Titus Ulph uncertainty University College London valuation wetland loss wetlands