EEP101_lecture19climatech - EEP-101-lecture 19 David...

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Unformatted text preview: 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 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 land-use 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. Hedonic Price (Richardian) Models 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? 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 problem- uncertainty 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 Greenhouse gases (GHG) are accumulating stocks Climate change as a stock Pollution problem that cause negative externalities_ They include carbon Methane etc. The Climate change problem can also be viewed as a public bad - shared by all without exludability GHG(t)=stock of GHG at t is evolving GHG(t)=GHG(t-1)+Emission(t)-Sequestration(t) Emissions can be reduced and sequestration can be enhanced by incentives – Carbon Tax – Sequestration subsidies- Implementing carbon taxes Carbon emission is not observed Gasoline and coal consumption is One can compute the carbon emission of observed activities-consumption of gasoline and electricity , use of fuels etc, and charge an amount that is equal to carbon emission per unit times carbon tax Alternatives -Subsidies for reduction in computed carbon emissions including subsidies for adoption of less polluting equipment Tradable permits for carbon emission rights Incentives for Carbon sequestration Payments for planting trees / not deforesting Payment for adoption of No or Low tillage – Traditional tillage releases carbon – Low tillage reduces emission significantly – However, one period of deep tillage emits the carbon stored during long period of no tillage Payment for schemes that will store carbon in oceans rocks etc • Warming not globally uniform • High-latitude amplification Albedo feedback Global Climate Models used to project climate change from different CO scenarios: Business as usual CO2 emission Stabilization of CO2 Control Fuel efficiency comparsions country Japan France UK Germany U.S Canada India China CO2/dollar GNP .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 1990 Intergovernmental Panel on Climate Change (IPCC) estab. 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 1994 1995 UN Framework Convention on Climate Change (UNFCCC) estab; “Earth Summit in Rio de Janeiro; Convention open for signatures UNFCCC came into force: recognition that climate change is a real problem 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 COP3: Kyoto Protocol; developed countries to reduce their collective emissions of 6 GHG’s (from 1990 levels) by at least 5% by 2008-2012 Kyoto Protocol open for signatures; 84 obtained in one year IPCC 3rd Assessment Report more evidence for human-induced climate change World Summit on Sustainable Development; Johannesburg 1997 1998 2001 2002 Parties to the Kyoto Protocol Annex 1 Countries (41) Annex B 24 OECD countries EIT and others 17 Countries (Russian Federation, Baltic States, Central & Eastern European States) Non­Annex 1 Countries (145) Initially the G­77, then Central Asian countries Mexico, S. Korea, Israel Implement and update climate change mitigation programs, promote climate­friendly technological development, and report on emissions and climate change policy. All subject to emission caps except the EITs who have certain degree of flexibility. Have to provide financial and technical assistance to developing countries to help meet their commitments. Key Features of the Kyoto Protocol ¥ Legally binding emission caps for Annex I Countries . Ð fixed caps on emission levels, allowing for some growth in some cases Ð fixed caps on emission levels, allowing for some growth in some cases Ð set by negotiation, not objective criteria Ð set by negotiation, not objective criteria Ð historical base year 1990 Ð historical base year 1990 Ð five­year commitment period from 2008­2012 Ð five­year commitment period from 2008­2012 Ð emission of 6 greenhouse gases, plus CO 2 absorptions from certain land Ð emission of 6 greenhouse gases, plus CO 2 absorptions from certain land use, land use change, or forestry use, land use change, or forestry ¥ Flexibility mechanisms Ð international emissions trading Ð international emissions trading Ð joint implementation Ð joint implementation Ð Clean Development Mechanism Ð Clean Development Mechanism ¥ Accountability mechanisms Ð measurement, recording, review of commitments Ð measurement, recording, review of commitments Ð procedures for dealing with non­compliance, as well as mandatory Ð procedures for dealing with non­compliance, as well as mandatory consequences for Annex I Countries Õ violations. consequences for Annex I Countries Õ violations. Negotiations for Second Commitment Phase ¥ Deeper Emission Cuts for Annex I Countries. ¥ Bringing in non­Annex 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 Ð could be drawn on when necessary. ¥ Limited capacity to assimilate emissions. ¥ Scarcity Ð value of having temporary right to use atmospheric commons. Differentiating the Burden of Abatement Objective: Stabilizing atmospheric concentration of greenhouse gases, while granting developing countries sufficient room for emission growth to meet their own development 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: energy­intensive industry/power producing sector/other domestic sectors ¥ Partial allowances per country depending on distribution of sectors CÌtv 0tsv qqtv etÌ cheedÌdsbdv hs s`whts`q 5`Ìc wt rtcheƒ hs qhfgw bhÌbxrvw`sbdv drdÌfhsf vbhdsbd @`pdv ` btssdbwhts adwdds 9tbpv hs e`ytÌ`aqd wÌd drhvvhts Ìdcxbwhts w`Ìfdwv `sc btxswÌhdv hwg gd`yƒ dsdÌ Ëtqhbhdv `sc rd`vxÌdv hscxvw̃ vdbwtÌv qqtv drhvvhtsv wÌ`chsf Carbon Intensity Approach ¥ Based on targets related to the carbon intensity of national economies Ð the amount of emissions produced per unit of GDP. ¥ Voluntary Ò intermediate Ó step for developing countries. CÌtv 0tsv ythcv wgd `qqtb`whts ËÌtaqdrv te CÌtËtÌwhts`wdqƒ q`ÌfdÌ vdÌ 8ƒtwt stw sdbdvv`Ìhqƒ ` Ìdcxbwhts h drhvvhtsv Atž gtw `hÌ ŸxscdÌrhshsf ssd‚ 6 1tdv stw hrËqƒ hsbÌd`vdc dsd w`Ìfdwv deehbhdsbƒ CÌtyhcdv hsbdswhydv etÌ 910v wt w`pd wÌ`c`aqd drhvvh EdvwÌhbwv ts ux`swheh`aqd w`Ìfdwv wt ssd‚ 6 btxswÌhdv ž FwtËf`Ë ŸtËwhts wg`w Ëxwv tee c`wd etÌ 910v w`phsf Ë`Ìw @`pdv hw g`Ìc wt ËÌdchbw `f qdydq te fqta`q drhvvhtsv Equal Per Capita Entitlements ¥ ¥ ¥ Establishes allowable level of global emissions, distributed equally among the global population, each country getting an entitlement proportionate to its population. Ultimate objective is to convert to equal per capita emissions over a stipulated time. Ò Contraction and Convergence Ó the key elements CÌtv FwÌtsf dwghb`q a`vhv FhrËqhbhwƒ te btsbdËw 0tsv 0tsbdÌsv `atxw`hÌ ž gtw Ÿ 9hrhwdc fqta`q `bbdËw`ah BeedÌv hsbdswhydv etÌ cdydqtËhsf btxsw̃ wÌ`chsf dvv 9hsp`fd hwg Ë`ÌwhbhË`whts vxbbdvv qqtv wgd 910v wt ËxÌvxd cdydqtËrdsw btsvhcdÌ fdtfÌ` 3`hqv wt ft`qv ghqd cdydqtËdc btxswÌhdv Ìdcxbd btschwhtsv tÌ wg bqhr`bwhb drhvvhtsv `sc 910v fÌt te d`bg dbtstrƒ hd btqc b gƒcÌt ËtdÌ 2sg`sbdrdsw te deehbhdsbƒ te fqta`q wÌ`chsf Beginning from the stroke of the new year, as they sit down to their evening meal on January 2, a US family will have already used, per person, the equivalent in fossil fuels that a family in Tanzania will depend on for the whole year. 6 5 4 3 (tons of C) 2 1 Annual per capital CO2 emissions 0 US Australia Saudi Arabia Russian Fed Japan S. Africa EU S. Korea World Avg China Brazil India Nigeria Bangladesh Source: Carbon Dioxide Information and Analysis Center, http:// devdata.worldbank .org/data­query/ Per Capita Approach: Winners and Losers ¥ Winners: Countries with large and growing populations or with low emissions. (China, India, Sub­Saharan Africa among LDCs, Japan, EU, France ) ¥ Losers: Oil­producing and/or more developed LDCs (Singapore, UAE, Argentina, South Africa, US, Russia) Good Policy on Climate Change Considers: Ð Scientific, political, ethical, economic factors Ensures Ð Flexibility Ð trading permits Ð Global participation Ð Proper mechanisms to address non­compliance 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 Nat i ons hav e s ov er ei gnt y f or d om t i c i m em es pl ent at i on 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.” Can help in gaining time Are subject to uncertainty in terms of impact and The Management of Sink Activities-soil carbon 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. ...
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This note was uploaded on 03/18/2010 for the course ECON C125 taught by Professor Zelberman during the Spring '09 term at University of California, Berkeley.

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EEP101_lecture19climatech - EEP-101-lecture 19 David...

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