economics

Ecosystems and Global Climate Change

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Ecosystems and Global Climate Change: A Review of Potential Impacts on U.S. Terrestrial Ecosystems and Biodiversity

Prepared for the Pew Center on Global Climate Change
December 2001

By:
Jay R. Malcolm, University of Toronto
Louis F. Pitelka, University of Maryland

Press Release

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Foreword

Eileen Claussen, President, Pew Center on Global Climate Change

Natural ecosystems are one of our most precious resources, critical for sustaining life on the planet. The benefits humans derive from ecosystems are varied, from marketable products such as pharmaceuticals, to recreational opportunities such as camping, to ecosystems services such as erosion control and water purification. For many people, nature plays a powerful spiritual and aesthetic role in their lives, and many place a high value on the existence of wilderness and nature for its own sake. Despite the critical roles ecosystems play, these areas are increasingly threatened by the impacts of a growing human population through habitat destruction and air and water pollution. Added to these stresses comes a new threat -- global climate change resulting from increased greenhouse gas concentrations in the atmosphere.

"Ecosystems and Global Climate Change" is the fifth in a series of the Pew Center reports examining the potential impacts of climate change on the U.S. environment. It details the very real possibility that warming over this century will jeopardize the integrity of many of the terrestrial ecosystems on which we depend. Among the many key issues raised are:

  • With warming, the distribution of terrestrial ecosystems will change as plants and animals follow the shifting climate. The eastern United States will likely lose many of its deciduous forests as the climate zones shift northwards, while more mountainous regions, like portions of the West, will see species and ecosystems migrate up mountain slopes from lower elevations.
  • Both the amount and rate of warming predicted represent a threat to our nation's biodiversity. Certain species may face dwindling numbers and even extinction if they are unable to migrate fast enough to keep up with the changing climate. Likewise, as warming shrinks the zone of cold conditions in upper latitudes and on mountains, the future of species that depend on such climates will be in jeopardy.
  • Climate change is likely to alter ecosystem composition and function — that is, which species make up an ecosystem and the way in which energy and materials flow through these systems. These modifications are bound to alter the amount and quantity of the various goods and services ecosystems provide.
  • Ecosystems are inherently complex and difficult to model, and our ability to predict exactly how species and ecosystems will respond to a changing climate is limited. This uncertainty limits our ability to mitigate, minimize, or ameliorate the effects of climate change on terrestrial ecosystems. In order to maximize nature's own potential to adapt to climate change, we must continue to support existing strategies to conserve biodiversity and protect natural ecosystems.

The authors and the Pew Center gratefully acknowledge the input of Drs. Anthony Janetos and Chris Field on this report. This report also benefited from comments received at the Pew Center's July 2000 Workshop on the Environmental Impacts of Climate Change. The Pew Center would also like to thank Joel Smith and Brian Hurd of Stratus Consulting for their assistance in the management of this Environmental Impacts Series.

Executive Summary

Climate is the single most important factor determining the geographic distributions of species and major vegetation types. It also influences the properties of ecosystems and the flows of energy and materials through them.

Global warming of the magnitude anticipated — a 1ºC to 4ºC (1.8ºF to 7.2ºF) increase in global mean temperatures over this century — will cause major changes in ecosystem distributions in the United States. In the eastern United States, these changes will result in a general northward shift in vegetation types. Results are more complex in the western United States due to local topography variation and small-scale climatic variations that result in complex, small-scale changes rather than broad northward shifts. The potential exists for significant reductions in the geographic extent of some ecosystems, especially those occurring in colder locales.

These shifts in major vegetation types due to global warming parallel the responses of the individual species that comprise these ecosystems. Thus, with global warming, shifts in the distributions of individual species are expected — in particular, a general poleward movement of distributions. Species have shifted their distributions in the past in response to changing climates; however, estimates of the rate of warming suggest that it may occur relatively quickly, some 10 times faster than the warming at the end of the recent glacial maximum, for example. It is not known whether species will be able to keep up with the rapidly shifting climatic zones. It is likely that some species will be unable to move at these high rates and hence may gradually die out as climatic conditions become increasingly unsuitable. The more rapid the rate of climate change, the greater the potential for this filtering effect. With higher temperatures, less of the earth will experience the cold conditions required by arctic and alpine species. As warming proceeds, these habitats are expected to decrease in size, leading to populations that are more isolated and to higher probabilities of extinction over time.

Climate change will also influence the functioning of ecosystems — the characteristic ways in which energy and chemicals flow through the plants, herbivores, carnivores, and soil organisms that comprise the living components of ecosystems. Models of overall changes in plant productivity indicate a wide range of possible changes across the lower 48 states, from slight declines (averaging 0.7 percent) to large increases (39 percent). Part of the uncertainly reflects poor understanding of how changes in temperature, moisture, and concentrations of carbon dioxide interact in influencing plant growth. Regional changes in productivity are not homogeneous, however, with some areas in the United States experiencing gains and others declines. For example, some scenarios show increases in plant productivity in the southeastern United States, whereas others showed large decreases under the influence of drier conditions. At the same time that increasing temperatures may lead to higher plant growth, they may also lead to higher decomposition rates and hence to increases in the rate at which carbon dioxide is being added to the atmosphere. It may be possible to increase the amount of carbon stored in ecosystems, and hence temporarily slow the rate of accumulation of carbon in the atmosphere (which comes primarily from the burning of fossil fuels) by planting forests on lands that currently do not support forests and by maintaining or increasing areas of mature and old growth forest.

Research on ongoing ecosystem change for several ecosystem types suggests that the effects of global warming on terrestrial ecosystems may already be altering ecosystems properties and species distributions. Nonetheless, there are substantial uncertainties as to how climate change will affect ecosystems and biodiversity in the United States. These uncertainties stem from not knowing the exact pattern of regional climate change as well as questions about how these patterns will affect the complex interactions and feedbacks among species and climatic conditions that characterize ecosystems. The effects of climate change on ecosystems and species are likely to be exacerbated in ecosystems that already are under pressure from human activities, including air and water pollution, habitat destruction and fragmentation, and the introduction of invasive species.

The effects of climate change on ecosystems threaten to jeopardize the numerous economically valuable goods and services that ecosystems provide to human societies, including services often undervalued in traditional economic analyses. In some cases, climate change will directly influence economic returns by affecting harvest levels; for example, warming-induced loss of salmon habitat from the United States would have a direct economic impact. Less easily measured are the potential effects of reduced species diversity on the ability of ecosystems to maintain local environmental quality; for example, removing pollutants from air and water and controlling soil erosion. Ultimately, the value of ecosystems must also be considered in a broad context, including the moral, cultural, and aesthetic values of ecosystems and species.

Efforts to lessen the detrimental effects on species and ecosystems from climate change should focus on maintaining habitats as well as on maintaining overall ecosystem structure and species composition. Thus, adaptation to climate change may benefit from existing strategies to conserve biodiversity, such as reducing fragmentation and degradation of habitats, increasing connectivity among habitat blocks and fragments, and reducing external anthropogenic environmental stresses. However, the ability to actively manage ecosystems to ameliorate the effects of climate change by, for example, actively assisting plant species to migrate, is constrained by lack of understanding and by the complexity of the underlying ecological systems. Even the seemingly simple task of reintroducing plants into former parts of their range has met with little success so far.

About the Authors

Jay R. Malcolm
Dr. Jay Malcolm received his B.S. and M.S. from the University of Guelph, his Ph.D. from the University of Florida, and undertook postdoctoral studies at Queen's University. Currently, he is an Assistant Professor in the Faculty of Forestry at the University of Toronto, where he has worked for the last four years. His research specializes on the effects of global climate change on ecosystems and more generally on the effects of human activities on biodiversity. In addition to laboratory and computer studies, Dr. Malcolm has undertaken extensive field research in boreal Canada and the Amazon and Congo Basins. In addition to this report for the Center, Dr. Malcolm has worked on climate change issues with the Canadian and U.S. Governments, UNEP, and WWF-US. Dr. Malcolm has published 43 articles, including papers in scientific journals, book chapters, and technical reports.

Louis F. Pitelka
Dr. Louis Pitelka received a B.S. in zoology from the University of California at Davis, and a Ph.D. in plant ecology from Stanford University. Dr. Pitelka has been at the University of Maryland since 1996, where he is currently the Director of the Appalachian Laboratory in Frostburg, MD, a research laboratory in the Universitys Center for Environmental Science. He also holds the rank of Professor in the University. From 1974 until 1984 he was a member of the faculty in the Department of Biology at Bates College in Maine and was Chair of Biology when he departed. In 1983, he was appointed Program Director of the Population Biology and Physiological Ecology Program at the National Science Foundation (NSF). Beginning in 1984, Dr. Pitelka worked for the Electric Power Research Institute, where his major research areas included global carbon cycling and effects of global climate change on terrestrial ecosystems.

Dr. Pitelka is the author of numerous scientific articles and has edited two books. He is the Editor-in-Chief of Ecological Applications, and previously served for five years on the journals editorial board. He also is on the Editorial Board of Oecologia. He is an Activity Leader in the Global Change and Terrestrial Ecosystems project of the International Geosphere Biosphere Program. He has served on numerous advisory committees and panels for the NSF, Department of Energy, NASA, Forest Service and other organizations and currently serves on the DOE Health and Environmental Research Advisory Committee.

 

A Review of Potential Climate Change Impacts on U.S. Terrestrial Ecosystems and Biodiversity
Jay R. Malcolm
Louis F. Pitelka
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An Introduction to the Economics of Climate Change Policy

An Introduction to the Economics of Climate Change Policy

Prepared for the Pew Center on Global Climate Change
July 2000

By:
John P. Weyant , Stanford University

Press Release

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Foreword

Eileen Claussen, President, Pew Center on Global Climate Change

What are the potential costs of cutting greenhouse gas emissions? Can such reductions be achieved without sacrificing economic growth or the standard of living we have come to enjoy? These are important questions, and they come up again and again as the United States and other nations consider what actions are needed in response to climate change.

Many participants in the climate change debate — in government, industry, academia, and non-governmental organizations — have conducted economic assessments to determine the costs of taking various actions to address climate change, with the number of economic assessments increasing exponentially in recent years. Differences among their quality and predicted cost of action, or inaction, have also grown, making it difficult to have faith in any one analysis.

The primary example of varying model results can be seen among the numerous reports predicting the domestic costs of complying with the Kyoto Protocol. Some have concluded the United States can reduce its emissions significantly below its Kyoto target (7 percent below 1990 levels), with net economic savings. Others have predicted dire effects on the U.S. economy. The truth most likely lies somewhere in-between.

Behind each analysis is an economic model with its own set of assumptions, its own definitions of how the economy works, and its own data sets. Unfortunately, these models often seem to be impenetrable "black boxes" allowing only a select few to decipher and interpret their results.

Fortunately, along with the rise in economic modeling there has also been a focus on identifying the differences among models. Professor John Weyant of Stanford University, the author of this report, has been at the forefront of these efforts as Director of the Energy Modeling Forum of Stanford University (EMF). His EMF working group convenes the world’s leading energy and climate modelers to discuss and model current energy policy topics.

In this report, Professor Weyant identifies the five determinants that together explain the majority of differences in modeling cost estimates. This is great news for those engaged in the climate change policy arena who are consumers of economic modeling results. Five key questions can be raised to help policy-makers understand the projected costs of climate change policy: What level of greenhouse gas emissions are projected under current policies? What climate policies are assumed to be put in place to achieve emissions reductions? What assumptions are made about how advances in technology might affect these emissions? To what extent are environmental impacts of climate change included? And is the full set of choices that firms and consumers have when presented with rising energy prices accounted for?

This paper would not have been possible without the assistance of numerous individuals. The author and the Pew Center would like to thank Ev Ehrlich, Judi Greenwald, Larry Goulder, Henry Jacoby, Rich Richels, Dick Goettle, Bill Nordhaus, and Bob Shackelton for their thoughtful comments on previous drafts of this paper.

We acknowledge the use of material from a background paper prepared by Robert Repetto, Duncan Austin and Gwen Parker at World Resources Institute.

Executive Summary

This paper is an introduction to the economics of climate change policy. The goal is to help the reader understand how analysts use computer models to make projections of mitigation costs and climate change impacts, and why projections made by different groups differ. In order to accomplish this goal, the paper will describe five key determinants of greenhouse gas (GHG) mitigation cost estimates.

The paper starts with a discussion of how the economy would adjust to restrictions on GHG emissions, especially carbon dioxide, the dominant, and easiest to measure GHG produced in the United States. Combustion of fossil fuels — oil, gas, and coal — produces large amounts of carbon dioxide. Central to this discussion is the role of energy price increases in providing the incentives for corporations and individuals to reduce their consumption of these fuels.

Energy price increases cause producers to substitute among the inputs they use to make goods and services, and consumers to substitute among the products they buy. Simultaneously, these price increases provide incentives for the development of new technologies that consume less energy in providing the goods and services that people desire. How a model represents these substitution and innovation responses of the economy are important determinants of the economic impacts of restrictions on GHGs.

Three other factors are crucial to economic impact projections.

First, the projected level of baseline GHG emissions (i.e., without any control policies) determines the amount of emissions that must be reduced in order to achieve a particular emissions target. Thus, other things being equal, the higher the level of base case emissions, the greater the economic impacts of achieving a specific emissions target. The level of base case emissions depends, in turn, on how population, economic output, the availability of energy fuels, and technologies are expected to evolve over time without climate change policies.

The second factor is the policy regime considered, i.e., the rules that govern the possible adjustments that the economy might make. International or domestic trading of GHG emissions rights, inter-gas trading among all GHGs, inclusion of tree planting and carbon sequestration as mitigation options, and complementary economic policies (e.g., using carbon tax revenues to reduce the most distortionary taxes in the economy) are all elements of the policy regime. Other things being equal, the more flexibility provided in the policy regime under consideration, the smaller the economic impacts of achieving a particular emissions target.

The third factor is whether the benefits of reducing GHG emissions are explicitly considered. An analyst may subtract such benefits from the mitigation cost projection to get a “net” cost figure or produce a “gross” cost figure that policy-makers can weigh against a benefit estimate. The kind of cost figure produced often depends on whether the analyst is trying to do a cost-benefit analysis or an analysis focused on minimizing the cost of reaching a particular emissions target.

Thus, this paper will describe the major input assumptions and model features to look for in interpreting and comparing the available model-based projections of the costs and benefits of GHG reductions. Two of the five key determinants — (1) substitution, and (2) innovation — are structural features of the economic models used to make emissions projections. The other three determinants are external factors, or assumptions. They are: (3) the base case projections, (4) the policy regime considered, and (5) the extent to which emissions reduction benefits are considered.

The results summarized in this paper illustrate the importance of these five determinants and the large role played by the external factors or assumptions. Cost projections for a given set of assumptions can vary by a factor of two or four across models because of differences in the models’ representation of substitution and innovation processes. However, for an individual model, differences in assumptions about the baseline, policy regime, and emissions reduction benefits can easily lead to a factor of ten or more difference in the cost estimates. Together these five determinants explain the majority of differences in economic modeling results of climate policy.

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