ENVS 55, Lecture _16

ENVS 55, Lecture _16 - ENVIRONMENTAL STUDIES 55 LECTURE...

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ENVIRONMENTAL STUDIES 55 LECTURE #16, 2/18/08 Announcements 1.Homework #3 is due on Wednesday 2.No class on Friday 3.Now is a good time to start thinking about the final paper Overview Last time: Implications of discounting for the conservation of ecological resources General question: Is it better to conserve an ecosystem to obtain a steady flow of annual benefits (B C ), or instead “liquidate” it to obtain a one-shot financial gain (V L )? 1
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From an economic perspective, conservation is efficient if and only if the rate of return generated by the resource (B C /V L ) is greater than or equal to the discount rate (r) Otherwise the “exploit and reinvest” option would generate greater present-value net benefits Tasks for today: 1.Discuss the implications of discounting in the economics of climate change 1.Derek Parfit’s critique of discounting procedures 2
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Discounting and Climate Change The costs and benefits of climate change policies have been a recurrent theme in the course (Goodstein, ch. 1). The basic issue (Howarth, 2005): Under “business-as-usual,” carbon dioxide might grow from 8 to 26 billion tonnes of carbon equivalent during the 21 st century This would cause an increase in mean global temperature of 2.6 ° C through 2105 and 4.7 ° C through 2205 The Framework Convention on Climate Change calls for the stabilization of greenhouse gas concentrations to avoid “dangerous anthropogenic interference” with the earth’s climate Hansen et al. (2006) call for carbon dioxide concentrations to be stabilized at around 450 parts per million. This would: (a) require emissions reductions of over 50% relative to current levels; (b) 3
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limit the long-term increase in mean global temperature to 0.7 ° C 4
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In the short-run, climate stabilization would reduce the rate of economic growth by forcing households and businesses to reduce energy use and/or shift towards higher-cost, low-carbon fuels In my model, Hansen et al. ’s 450 ppm scenario would reduce
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This note was uploaded on 04/25/2008 for the course ENVS 055 taught by Professor Rotating during the Winter '07 term at Dartmouth.

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ENVS 55, Lecture _16 - ENVIRONMENTAL STUDIES 55 LECTURE...

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