Did the Stern Review underestimate US and global climate damages?

Ackerman, Frank; Stanton, Elizabeth A.; Hope, Chris; Alberth, Stephane

doi:10.1016/j.enpol.2009.03.011

Cited by 43 publications

(22 citation statements)

References 8 publications

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“…The effect of the changes in societal structure and technology is captured through the economic and non-economic impacts as a polynomial function of the regional temperature the same range as in Ackerman et al (2009). The total damages of climate change are capped at the statistical value of civilisation as suggested in Weitzman (2009).…”

Section: The Page09 Modelmentioning

confidence: 99%

“…While Ackerman et al (2009) suggested that the Stern Review understates the climate change damages, a comparison of studies over the last 12 years shows varying estimates of the marginal impacts of CO 2 , ranging from US$0.4 to US$445.0/tCO 2 as presented in Table 1. With differing approaches and assumptions with regard to the key variables such as the discount rates and damage functions, each IAM gives different estimates of the SCCO 2 reflecting the inherent uncertainty surrounding climate change (Bowen and Ranger 2011;Stanton et al 2008;Stern 2006).…”

Section: Introductionmentioning

confidence: 98%

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The impact of time horizon on integrated climate assessment models

Wong

Chuah

Hope

2015

Clean Techn Environ Policy

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The PAGE09 model is a revised version of the earlier PAGE2002 and PAGE95 integrated assessment models (IAMs) that have been extensively used to evaluate climate change impacts and the social costs and benefits of different abatement and adaptation policies under uncertainty. This paper investigates the use of the latest PAGE09 model as a policy-oriented tool in determining an efficient climate change policy that internalises the mean social cost of carbon dioxide (SCCO 2 ). We show that the choice of final analysis year, time horizon and the carbon dioxide (CO 2 ) emissions pathway in the PAGE09 model do significantly affect the model results for the SCCO 2 and its trajectory over time and so the prescriptions of future climate policy. Further analysis shows that a constant time horizon and a slight modification of the penultimate analysis year which is currently fixed in the default model help avoid the underestimation of the SCCO 2 in future years. This paper also highlights the potential benefit of a consensus position on the specification of time horizon for the development of future IAMs to aid policy making.

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Section: The Page09 Modelmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 98%

The impact of time horizon on integrated climate assessment models

Wong

Chuah

Hope

2015

Clean Techn Environ Policy

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“…Using a normal distribution for climate sensitivity implies that SCCO2 would be larger than 374 $/tCO2 with a 17 The same is done in Dietz et al (forthcoming). 18 Many of the reasons for this (especially the differences between PAGE2002 and PAGE09) are explained in Ackerman et al (2009b) and Hope (2011). 5 percent probability, and there would be a probability of 1 percent that the value of SCCO2 is above 841 $/tCO2 (which is 88 percent higher than the 99 th percentile of the standard PAGE09 Model). In the case of the Pareto distribution the value of the 95 th percentile is 564 $/tCO2 and that of the 99 th percentile 19 is 2,797 $/tCO2, which corresponds to an increase of 144 percent and 525 percent respectively, with respect to the estimates of the standard PAGE09 Model.…”

Section: Climate Sensitivity Parameter (Sens)mentioning

confidence: 99%

A Tale of Tails: Uncertainty and the Social Cost of Carbon Dioxide

Pycroft¹,

Vergano

Hope³

et al. 2011

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Juan Carlos Ciscar IPTS, European Commission, SevilleAbstract Recent thinking about the economics of climate change has concerned the uncertainty about the upper bound of both climate sensitivity to greenhouse gases and the damages that might occur at high temperatures. This argument suggests that the appropriate probability distributions for these factors may be fat-tailed. The matter of tail shape has important implications for the calculation of the social cost of carbon dioxide (SCCO2). In this paper a probabilistic integrated assessment model is adapted to allow for the possibility of a thin, intermediate or fat tail for both (i) the climate sensitivity parameter and (ii) the damage function exponent. Results show that depending on the tail shape of the climate sensitivity parameter the mean SCCO2 rises by 29 to 85 percent. Changes in the mean SCCO2 due to the adjustments to the damage function alone range from a reduction of 7 percent to a rise of 12 percent. The combination of both leads to rises of 33 to 115 percent. Greater rises occur for the upper percentiles of the SCCO2 estimates. Given the uncertainties in both the science and the economics of climate change different tail shapes deserve consideration due to their important implications for the range of possible values for the SCCO2.

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“…Nonetheless, studies that consider the impacts in the absence of adaptive responses to them show a GDP loss of 0.4% by 2050, growing to a GDP loss of 1.73% by 2100 . Ackerman et al (2009) determined a GDP loss of 2.6% in 2100 that has a 17% likelihood of occurrence. Tol and Fankhauser (1998) present the issues associated with the self-consistency between cost (mostly in the domain of mitigation) and adaptation (often limited to improvements in energy usage).…”

Section: Impact Studiesmentioning

confidence: 99%

Assessing the near-term risk of climate uncertainty : interdependencies among the U.S. states.

Reinert¹,

Stamber²,

Robinson³

et al. 2010

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Policy makers will most likely need to make decisions about climate policy before climate scientists have resolved all relevant uncertainties about the impacts of climate change. This study demonstrates a risk-assessment methodology for evaluating uncertain future climatic conditions. We estimate the impacts of climate change on U.S. state-and national-level economic activity from 2010 to 2050. To understand the implications of uncertainty on risk and to provide a near-term rationale for policy interventions to mitigate the course of climate change, we focus on precipitation, one of the most uncertain aspects of future climate change. We use results of the climate-model ensemble from the Intergovernmental Panel on Climate Change's (IPCC) Fourth Assessment Report 4 (AR4) as a proxy for representing climate uncertainty over the next 40 years, map the simulated weather from the climate models hydrologically to the county level to determine the physical consequences on economic activity at the state level, and perform a detailed 70-industry analysis of economic impacts among the interacting lower-48 states. We determine the industry-level contribution to the gross domestic product and employment impacts at the state level, as well as interstate population migration, effects on personal income, and consequences for the U.S. trade balance. We show that the mean or average risk of damage to the U.S. economy from climate change, at the national level, is on the order of $1 trillion over the next 40 years, with losses in employment equivalent to nearly 7 million full-time jobs.4

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Did the Stern Review underestimate US and global climate damages?

Cited by 43 publications

References 8 publications

The impact of time horizon on integrated climate assessment models

The impact of time horizon on integrated climate assessment models

A Tale of Tails: Uncertainty and the Social Cost of Carbon Dioxide

Assessing the near-term risk of climate uncertainty : interdependencies among the U.S. states.

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