Workshop Proceedings: Assessing the Benefits of Avoided Climate Change: Cost-Benefit Analysis and Beyond
Workshop Proceedings: Assessing the Benefits of Avoided Climate Change: Cost-Benefit Analysis and Beyond
Based on decades of research by the scientific community, there is now wide recognition that emissions of greenhouse gases are changing our climate and that the future impacts from such changes will largely be harmful. In response, policymakers across the U.S. government are beginning to consider what actions should be taken to limit climate change damages. An important tool used in making such policy choices is cost-benefit analysis (CBA), but this technique has been widely criticized as inadequate as the primary approach to valuing the impacts of climate change.
In March 2009, the Pew Center on Global Climate Change convened an expert workshop to examine the state of the art, limitations, and future development needs for analyzing the benefits of avoided climate change. Approximately 80 people from academe, federal agencies, and nongovernmental organizations participated. This event was motivated by widespread recognition of two developments: First, policy decisions that result in reduced greenhouse gas emissions are becoming more commonplace across the government. Second, one of the key tools used to analyze such policies, CBA, is challenged by the longterm, global, and uncertain nature of climate change.
Drawing from the environmental economics, impacts and vulnerability, and risk analysis communities, the workshop sought to glean insights on how to better quantify the benefits of reducing greenhouse gas emissions. The main objectives were to inform the development of a set of practical recommendations that decision makers could employ in the near-term and to outline new approaches to improve decision-making tools over time. Based on the outcome of the workshop, the Pew Center responded to the Office of Management and Budget’s request for public comments on how to improve the process and principles governing federal regulatory review. In February 2010, the Interagency Working Group on the Social Cost of Carbon issued a report detailing its recommendations for how this metric should be calculated in agency regulatory decisions.
Summary Report (pdf)
- The Economics of Climate Change Impacts: A Case Study on the Motivation for Government Decisions to Limit Greenhouse Gas Emissions
James Lester and Joel B. Smith, Stratus Consulting
- Challenges to Providing Quantitative Estimates of the Environmental and Societal Impacts of Global Climate Change
Michael C. MacCracken, Climate Institute
L. Jeremy Richardson, Pew Center on Global Climate Change
- Social Vulnerability and Risk
Kristie L. Ebi, ESS, LLC and IPCC Working Group II Technical Support Unit
- Representation of Climate Impacts in Integrated Assessment Models
Michael D. Mastrandrea, Stanford University
- The Social Cost of CO2 and the Optimal Timing of Emissions Reductions under Uncertainty
Chris Hope, Judge Business School, University of Cambridge
- Federal Decision-Making on the Uncertain Impacts of Climate Change: Incremental vs. Non-Incremental Climate Decisions
Steven K. Rose, Electric Power Research Institute
- The Need for a Fresh Approach to Climate Change Economics
Frank Ackerman, Stockholm Environment Institute
Stephen J. DeCanio, University of California, Santa Barbara
Richard B. Howarth, Dartmouth College
Kristen Sheeran, Economics for Equity and the Environment Network
- Uncertainty and the Benefits of Climate Change Policies, Newbold and Daigneault
Stephen C. Newbold, U.S. EPA, National Center for Environmental Economics
Adam Daigneault, U.S. EPA, Climate Change Division
- Keynote Address: Addressing Climate Change through a Risk Management Lens
Gary W. Yohe, Wesleyan University
May 3, 2010
Contact: Tom Steinfeldt, 703-516-4146
Pew Center on Global Climate Change Releases Report Assessing
the Benefits of Avoided Climate Change
Workshop Proceedings Suggest Risk-Management Approach
Washington, D.C. – There is now wide recognition that emissions of greenhouse gases are changing the global climate in ways that are largely harmful. In response, policymakers across the U.S. government are beginning to consider what actions should be taken to limit climate change damages.
An important tool used in making such policy choices is cost-benefit analysis (CBA). But this technique has been widely criticized as inadequate as the primary approach to valuing the impacts of climate change.
Motivated by recent attempts by government agencies to account for the benefits of reduced greenhouse gas emissions in rulemaking, the Pew Center on Global Climate Change held an expert workshop to examine the current state of the art, limitations, and future development needs for analyzing the benefits of avoided climate change. Approximately 80 experts from academe, nongovernmental organizations, and the federal government attended.
“The benefits of avoided climate change are substantial, but too often they are underestimated or ignored,” said Eileen Claussen, President of the Pew Center on Global Climate Change. “Incorporating the risks of inaction into our assessments of greenhouse gas reduction benefits will give us a more accurate view of the benefits of acting. These proceedings help identify practical steps forward to provide policy makers with more sound estimates of the benefits of climate action.
The main objectives of the workshop were to inform the development of a set of practical recommendations that decision makers could employ in the near term and to outline new approaches to improve decision-making tools over time. Based on the outcome of the workshop, the Pew Center submitted recommendations on the appropriate use of cost-benefit analysis to the Office of Management and Budget during its 100-day review of its own role in regulatory review. These recommendations are available on the Pew Center’s web site: http://www.c2es.org/docUploads/Pew-Recommendations-OMB.pdf.
Many participants agreed that estimates of the social cost of carbon (i.e. benefits estimates used in CBA) are systematically biased low and require significant improvement. However, with such improvements, and with appropriate discounting, CBA can be an appropriate tool for incorporating the societal benefits of reduced greenhouse gas emissions into individual policies, such as CAFE standards, that would reduce greenhouse gas emissions incrementally.
A major focus of the workshop was the inadequacy of traditional analytical tools, such as CBA, for guiding policy decisions about non-incremental changes in economy-wide greenhouse gas emissions. Many participants recommended a risk-management approach that views climate stabilization as insurance against uncertain but intolerable outcomes.
The workshop report contains an extended summary of 17 presentations and the full text of nine background papers by experts in climate science and economics. Please visit http://www.c2es.org/events/2009/benefitsworkshop to access the full contents of the workshop proceedings, including video of expert presentations and free downloads of the workshop summaries and background papers.
For more information about global climate change and the activities of the Pew Center, visit http://www.c2es.org.
# # #
The Pew Center was established in May 1998 as a non-profit, non-partisan, and independent organization dedicated to providing credible information, straight answers, and innovative solutions in the effort to address global climate change. The Pew Center is led by Eileen Claussen, the former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs.
Today we released a report on climate change adaptation and the role of the federal government.
As we continue to await Senate action on a comprehensive bill that limits carbon pollution and grows the clean energy economy, the words of NOAA Administrator Jane Lubchenco resonate:
“Climate change is happening now and it's happening in our own backyards and it affects the kinds of things people care about.”
Ambitious greenhouse gas reduction programs are essential to prevent the worst impacts, but some impacts are unavoidable, such as more intense Midwestern heat waves, Western wildfires, and coastal threats from rising sea levels. If you haven’t already, check out this great map from the U.S. Global Change Research Program’s report on climate change impacts across the United States or look at EPA’s recent report on climate change indicators.
Source: U.S. Global Change Research Program. Global Climate Change Impacts in the United States. 2009. http://www.globalchange.gov/publications/reports/scientific-assessments/us-impacts/usimpacts-brochures.
If we hope to minimize the costs of these impacts we’re going to have to better understand our vulnerabilities to climate change and begin to take steps to adapt.
While the Senate’s effort to take up comprehensive clean energy and climate legislation remains on hold awaiting a resolution of when and if an immigration bill will be considered, EPA just issued a new report that sends a loud and clear reminder about why Congressional action is urgent. The report, Climate Change Indicators in the United States, presents detailed information documenting 24 different ways in which climate change is altering our nation and the world.
This is not your standard climate report with pages and pages of scenarios and model runs projecting out over time what future climate impacts are possible. Instead, this report looks back and documents biological and physical changes that have already occurred. It focuses on actual measurements of real conditions – from increases in greenhouse gas concentrations measured in the atmosphere to changes in sea surface temperatures to shifts in the length of growing seasons.
What Is Black Carbon?
Black Carbon (BC) has recently emerged as a major contributor to global climate change, possibly second only to CO2 as the main driver of change. BC particles strongly absorb sunlight and give soot its black color. BC is produced both naturally and by human activities as a result of the incomplete combustion of fossil fuels, biofuels, and biomass. Primary sources include emissions from diesel engines, cook stoves, wood burning and forest fires. Reducing CO2 emissions is essential to avert the worst impacts of future climate change, but CO2 has such a long atmospheric lifetime that it will take several decades for CO2 concentrations to begin to stabilize after emissions reductions begin. In contrast, BC remains in the atmosphere for only a few weeks, so cutting its emissions would immediately reduce the rate of warming, particularly in the rapidly changing Arctic. Moreover, reduced exposure to BC provides public health co-benefits, especially in developing countries. Technologies that can reduce global BC emissions are available today.
Black Carbon and Climate Change
BC warms the climate in two ways. When suspended in air, BC absorbs sunlight and generates heat in the atmosphere, which warms the air and can affect regional cloud formation and precipitation patterns. When deposited on snow and ice, it absorbs sunlight, again generating heat, which warms both the air above and the snow and ice below, thus accelerating melting. Because BC remains in the atmosphere for only one to four weeks, its climate effects are strongly regional. Its short lifetime also means that its climate effects would dissipate quickly if black carbon emissions were reduced, thus benefiting most directly the countries or communities that invest in policies to reduce BC emissions.
A recent study suggests that BC may be responsible for more than 30 percent of recent warming in the Arctic, contributing to the acceleration of Arctic sea ice melting. Loss of Arctic sea ice would lead to more rapid warming and possibly irreversible climate change. BC is also driving increased melting of Himalayan glaciers, which are a major source of freshwater for millions of people in the region. BC may also be driving some of the observed reduction of the snowpack in the Pacific Northwest of the United States.
Different types of soot contain different amounts of BC—generally the blacker the soot, the more of a warming agent it is. Fossil fuel and biofuel soot are blacker than soot from biomass burning (e.g., forest fires and wood fuel), which is generally more of a brownish color. Thus, controlling emissions of soot from fuel sources is an effective way of reducing atmospheric temperatures in the short term. Based on current information, the United States is responsible for about 6 percent of global BC emissions; while it has a history of making reductions to improve air quality, further improvements can be made. The majority of BC emissions come from the developing world: China and India together account for some 25–35 percent of emissions.
Control technologies that reduce BC include retrofitting diesel vehicles with filters to capture BC, fuel switching (e.g., from diesel to natural gas in buses), and replacement of inefficient cook stoves with cleaner alternatives. Adopting these alternatives would have positive co-benefits for public health, especially in the developing world. For example, retrofitting or replacing diesel buses and trucks would greatly improve urban air quality in densely populated cities. Replacement of dirty cook stoves with cleaner alternatives, such as solar cookers or newer models that burn fuel more completely, would improve indoor air quality, which is a major health concern in both urban and rural areas of the developing world.
Reducing BC emissions represents a win-win scenario: it would have an immediate cooling effect on the Earth’s climate, potentially delaying temperature increases in the short run and helping reduce the risk of irreversible tipping points in the climate system, and it would reduce air pollution, resulting in fewer premature deaths and fewer missed work and school days.
2. BC is a carbonaceous aerosol. An aerosol is a suspension of fine solid particles or liquid droplets within a gas. Examples include smoke, air pollution, smog, oceanic haze, and tear gas. Carbonaceous refers to a substance rich in carbon.
5. The American Clean Energy and Security Act of 2009 reported out of the U.S. House Energy and Commerce Committee on May 21, 2009, has a significant section on BC emissions, directing the EPA Administrator to investigate BC sources, impacts, and mitigation technologies.
Most development and analysis of climate change policies have focused on reducing carbon dioxide and other greenhouse gases (GHGs), which are widely recognized as the major contributors to climate change. And as we blogged about last year, far less attention has been given to black carbon (BC). However things may be changing. Inspired by University of California – San Diego professor Veerabhadran Ramanathan’s Foreign Affairs article, “The Other Climate Changers,” the United States House Select Committee on Energy Independence and Global Warming held a hearing last Tuesday to investigate the impacts of black carbon pollution. The takeaway message from this hearing is that BC policies should be complementary to efforts to reduce GHG gases. Reductions in emissions of black carbon would have near-term effects on reducing global warming that are not possible from actions directed at carbon dioxide and other long-lived gases. Reducing BC is good for the environment, public health, and creates jobs. We recently published a detailed primer on BC science and policy.
Both professors Ramanathan and Tami Bond of University of Illinois at Urbana-Champaign gave an overview of the science of black carbon – uncombusted materials like soot and smoke. A growing body of evidence indicates that soot and smoke are major contributors, possibly second only to carbon dioxide, to human-induced global warming. BC warms the air by absorbing sunlight in the atmosphere, changes rainfall patterns and, when deposited on snow and ice, accelerates melting. According to Professor Ramanathan, BC’s warming effect is around 40 to 70 percent of that of carbon dioxide. However, unlike carbon dioxide, black carbon does not accumulate in the atmosphere; it stays in the atmosphere for a few weeks, so the impacts are more concentrated in the areas where they are produced, and reducing BC emissions would have near-term benefits in those areas.
BC is produced by both natural processes and human activity from the incomplete combustion of fossil fuels, biofuels, and biomass. According to Professor Ramanthan, the regional effects of BC are particularly large over the Arctic, Africa, and Asia. BC leads to increased melting of snow and ice in the Arctic, Sahelian drought, and decreased monsoon rainfall. Primary sources include diesel engines, small industrial sources, residential coal and solid biofuels for cooking and heating, and agricultural and forest fires.
Since the impacts of BC are regional, there are significant local environment, public health, and economic benefits of reducing BC emissions. Reducing BC emissions in India for example, would not only produce environmental benefits of cleaner air and negate rainfall loss, but would also save lives. Professor Ramanathan’s calculations indicate that replacing cook stoves in India with advanced biomass stoves could prevent 2 million deaths from the reduction of particulate matter produced by traditional stoves. Mitigating BC emissions would also prevent reduced rainfall and reduced agriculture yields.
According to another panelist, Conrad Schneider, Advocacy Director of the Clean Air Task Force, reducing BC emissions can create clean jobs here in the United States. Even though BC isn’t much of a climate forcing in the U.S. and a potentially expensive source of reductions, there is a billion dollars worth of work to reduce diesel’s BC emissions. For example, retrofitting 11 million diesel engines in the U.S. today could achieve the same environmental benefit as removing 21 million cars from the road, would save approximately 7,500 lives through reduced particulate matter pollution, and create tens of thousands of domestic jobs.
In order to get the environmental, economic, and public health benefits of reduced BC emissions, all the witnesses agreed that action must be taken. For more information, please check our white paper on the climate impacts of black carbon.
The following first appeared as a "Letter to the Editor" in today's Washington Post.
In his Feb. 21 op-ed column, "Global warming advocates ignore the boulders," George F. Will concluded, incorrectly, that the Earth isn't warming. Mr. Will referred to climate scientist Phil Jones, who said that the planet did warm from 1995 to 2009 but not "at the 95 percent significance level." But Mr. Jones also cautioned that 15 years is too short to expect statistical significance. That is why climate norms -- such as the "normal" daily temperatures that forecasters show on the local news -- are 30-year averages. The Post's readers might be interested to know, therefore, that the global warming trend from 1980 to 2009 -- a little over 1 degree Fahrenheit -- is statistically significant at the 99.9999 percent level.
Climate scientists have always stated clearly that it takes decades to detect a change in the climate, so why focus on just the last 15 years?
From its own reading of the peer-reviewed literature, the National Academy of Sciences concluded, "It is unequivocal that the climate is changing, and it is very likely that this is predominantly caused by the increasing human interference with the atmosphere. These changes will transform the environmental conditions on Earth unless counter-measures are taken."
This week, the National Journal Experts Blog asks: Can a U.N. probe calm the climate science storm?
In considering what should be done in light of recent revelations about aspects of the IPCC report, it is critical to distinguish between two different issues. One has to do with the IPCC itself. And yes, it is clear that here reforms are in order. The IPCC needs to clarify what sources can be cited in its reports, that all sources are properly verified, and that these guidelines are enforced. Because of the important role the IPCC report plays in international discussions, the standard for accuracy and reliability of everything it issues must be very high. The independent review announced by UNEP and a transparent discussion about these issues at the next IPCC plenary is a necessary and welcome step.
The second issue relates to our basic understanding of climate science. Here I think the answer is equally clear. None of what we have recently heard or read changes the basic scientific consensus that human activities have increased greenhouse gases in the atmosphere, that these greenhouse gases have raised temperatures (and the more we put into the atmosphere, the more temperatures will increase), that sea level has risen and ice cover declined as a result, and that unless we act now to slow future emissions, we should expect these changes to get worse over time.
The body of scientific evidence behind these concerns has developed and grown over decades of research. It is reflected in assessments by the National Academy of Sciences going as far back as the 1970s. And it is reflected in the IPCC’s physical science assessment, which remains above reproach three years after its release.
There seems to be some confusion out there about weather vs. climate. For example, a Virginia Republican Party video urged citizens to call their Congressmen and tell them how much global warming they got during the big snowstorm a couple of weeks ago. But that doesn’t really make any sense. In simple terms, weather determines whether you need to take an umbrella with you today; climate determines whether you need to own an umbrella. Weather determines whether you need your down coat today; climate determines whether you need to own a down coat. Weather determines whether you turn on your air conditioning unit today; climate determines whether you own an air conditioner. Weather determines whether the plants in your garden have a good day; climate determines what plants will likely thrive in your local environment.
Climate is the long-term average of weather. Weather changes all the time; climates are generally fairly stable, allowing us to make long-term decisions based on the notion that the future climate will be like the past. One unusual weather event does not mean the climate is changing. But many unusual weather events could mean the climate is changing. And climate change will mean that on average, the weather we will have in the future will be different from what we had in the past. That could even mean that record-breaking snowfall events happen more and more often in Virginia and Washington, D.C.
ANCHORAGE - "Hello. I'm a Republican, and I believe in climate change." These words opened a presentation at the Alaska Forum on the Environment and indicate that, here in Alaska, issues surrounding climate change have often transcended the partisanship that sometimes dominates the issue 3,000 miles away in Washington.
This bipartisanship has evolved because probably no place in America is the evidence of climate change more clearly on display than in Alaska. Climate change’s leading edge is in the Arctic, and temperatures in Alaska have risen 4 degrees or even more depending on location. With warming and its impacts visible to all and being increasingly analyzed on a local level, discussions of climate change, especially as it relates to adaptation, take on a tone all too unfamiliar inside the Beltway.