Science and economics of climate change

Science and economics of climate change

Science of climate change

The atmosphere functions as a ‘greenhouse’ and insulates the earth from extremes of temperature. The greenhouse effect works in the following manner. Of the incoming short-wave radiation from the sun, one-third is reflected, and the atmosphere, ocean, ice, land, and biota absorb the balance. The surface returns some of the heat to the atmosphere as sensible heat and as evapotranspiration. In addition, the surface reflects energy in the form of long-wave radiation, part of which escapes through ‘the atmospheric window’ and part of which is absorbed by the atmosphere.

The balance between the energy absorbed and emitted as long-wave infra-red radiation can change due to a number of factors, like a change in the output of energy from the sun, slow variations in the earth’s orbit, and the greenhouse effect. The greenhouse effect is the most important effect for survival and is one which humankind has the capacity to change.

Short-wave radiation can pass through the atmosphere, whereas long-wave terrestrial radiation emitted by the warm surface of the earth is partially absorbed by a number of trace gases in the cooler atmosphere above. These trace gases are called greenhouse gases. The main natural GHGs are water vapour, carbon dioxide (CO2 ), methane (CH4 ), nitrous oxide (N2 O), and ozone (O3 ) in the troposphere and stratosphere. In the absence of these GHGs, the mean temperature of the earth’s surface would have been about 33o C lower than what it is today. Thus, these gases are essential for maintaining a habitable temperature on earth.

Human activities are increasing the concentration of the naturally existing GHGs and adding new ones like chlorofluorocarbons (CFCs). Increasing anthropogenic GHG emissions and resultant higher concentrations levels are capable of raising the global average annual mean surface–air temperatures (referred to as global temperatures) through an enhanced greenhouse effect. Other potential indirect impacts of rising temperatures are changes in precipitation quantity and pattern and in vegetation cover and soil moisture, increased intensity of tropical storms, as well as a rise in the sea level due to the thermal expansion of water and the melting of polar ice sheets. From the economic and social point of view, the indirect impacts, like changes in precipitation patterns, soil moisture, sea level, and storm frequency and their regional distribution, are important.

The concentrations of GHGs have been increasing since preindustrial times due to human activities. Direct measurements of CO2 started in 1957 at the South Pole and in 1958 at Mauna Loa. Data on CO2 concentrations prior to 1957 have been obtained from air bubbles in ice cores, which provide a direct record of past concentrations well before the industrial revolution.

CO2 , CH4 , and N2 O all have significant natural and human sources, whereas CFCs are produced only through industrial processes. Water vapour and ozone are two GHGs that have not been included in any study. This is because the concentration of water vapour is determined internally within the climate system, and, in the case of ozone, it is difficult to quantify changes in the concentration of ozone as a result of human activity. Though the changes in atmospheric concentrations of GHGs are well established, with the exception of CFCs, there are major gaps in understanding the flow of these gases between their sources and sinks.

The average annual CO2 emissions from fossil fuels and cement production for 1980 to 1989 are 5.5 ± 0.5 GtC. For 1994, these emissions were 6.1 GtC/year. Uncertainties in estimating CO2 emissions from deforestation and land-use change are large and the IPCC puts a tentative figure as 1.6 ± 1 GtC during 1980s. For CH4 ,there are still many uncertainties. However, an amount of 500 teragrams (Tg) can be deduced from the magnitude of its sinks combined with its rate of accumulation in the atmosphere. Recent methane isotopic studies suggest that 20% of the total CH4 is of fossil origin. Greater uncertainties exist with respect to N2 O and other GHGs. The best estimate for the 1980s of current anthropogenic emissions of N2 O is 3–8 Tg (N)/year.



The economics of climate change

Abatement of GHGs, particularly CO2 , implies curtailment of energy consumption. Energy is a vital factor of production, and its replacement and/or reduction will entail a shift away from current production methods. If current systems employ efficient production techniques, a change in factor proportions will increase the cost of production, and have an adverse impact on the national income. This section briefly summarizes the crucial factors determining the cost of abatement and outlines the present understanding of the cost to the economy of the GHG abatement policies.

A wide variety of models have been developed in both economic and engineering disciplines to assess the costs of GHG abatement policies. The differences in model estimates are wide and a number of factors contribute to these differences. The following sub-sections discuss the two main traditions of modelling – namely, top-down and bottom-up, and their cost estimations; and the potential of the so-called whereand when flexibilities in bringing down the abatement costs.

Empirical evidence suggests that internal diseconomies of scale are likely to lead to increasing marginal costs of response options. The literature on response options focuses mainly on individual technologies and their cost-effectiveness. Emphasis on engineering aspects and the limited availability of reliable and accepted data on the costs and benefits of response options has resulted in the assessment of options in isolation rather than on the basis of mutual comparison. However, a generic assessment would require a framework that allows for a simultaneous evaluation of technologies or options.

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