The United States has adopted fuel economy standards that require increases in the on-road efficiency of new passenger vehicles, with the goal of reducing petroleum use, as well as (more recently) greenhouse gas (GHG) emissions. Understanding the cost and effectiveness of this policy, alone and in combination with economy-wide policies that constrain GHG emissions, is essential to inform coordinated design of future climate and energy policy. In this work we use a computable general equilibrium model, the MIT Emissions Prediction and Policy Analysis (EPPA) model, to investigate the effect of combining a fuel economy standard with an economy-wide GHG emissions constraint in the United States. First, a fuel economy standard is shown to be at least five to fourteen times less cost effective than a price instrument (fuel tax) when targeting an identical reduction in cumulative gasoline use. Second, when combined with a cap-and-trade (CAT) policy, the fuel economy standard increases the cost of meeting the GHG emissions constraint by forcing expensive reductions in passenger vehicle gasoline use, displacing more cost-effective abatement opportunities. Third, the impact of adding a fuel economy standard to the CAT policy depends on the availability and cost of abatement opportunities in transport—if advanced biofuels provide a cost-competitive, low carbon alternative to gasoline, the fuel economy standard does not bind and the use of low carbon fuels in passenger vehicles makes a significantly larger contribution to GHG emissions abatement relative to the case when biofuels are not available. This analysis underscores the potentially large costs of a fuel economy standard relative to alternative policies aimed at reducing petroleum use and GHG emissions. It also demonstrates the importance of jointly considering the effects of multiple policies aimed at reducing petroleum use and GHG emissions, and the associated economic costs.

Owing to rising populations, increasing per capita water use, environmental flow requirements, and climate change, our results suggest that by 2050 there will be significant threats to water availability for agriculture in many regions of the world. If rising agricultural demands and the full spectrum of climate change effects are taken into account, threats to water availability will be considerably more pronounced. It is therefore likely that, unless broad changes are made to the way environmental and water resources are governed, conflicts over water for agriculture will increase markedly by the middle of the twenty-first century. Changes in governance may include reforming the policies and institutions that manage and allocate water, improving access to water in the poorest regions of the world, enhancing ecosystem services, recognizing water as an economic good in order to promote efficiency use, improving rain-fed and irrigation infrastructure to increase "crop per drop", and making agriculture more resilient to changes in climate. In the light of these threats to water for agriculture, and therefore to global food availability, it is important—and urgent—that water planning efforts be coordinated and integrated across sectors, particularly in the most vulnerable regions.

© 2013 United Nations

In this correction, we fix the mismatch that existed between model and observational annual averages. When calculating annual averages from model output, seasonal means were averaged, resulting in a given year being the average from December through November. When calculating annual averages from observational data, monthly means were averaged, resulting in a given year being the average from January through December. To correct for this 1 month mismatch, all annual mean temperatures derived from observations are calculated as December to November means, subject to the threshold criterion described in Libardoni and Forest [2011]. Because decadal mean temperatures are used for the surface temperature diagnostic, the 1 month shift in the averaging window has minimal impact on the resulting observational time series. Across all five decades and four zonal bands, the temperature differences due to the 1 month shift are at most 0.05C. The revised time series are not shown.

© 2013 American Geophysical Union

The wide range of cost estimates for stabilizing climate is puzzling to policy makers as well as researchers. Assumptions about technology costs have been studied extensively as one reason for these differences. Here, we focus on how policy timing and the modeling of economy-wide interactions affect costs. We examine these issues by restructuring a general equilibrium model of the global economy, removing elements of the model one by one. We find that delaying the start of a global policy by 20 years triples the needed starting carbon price and increases the macroeconomic cost by nearly 30%. We further find that including realistic details of the economy (e.g. sectoral and electricity technology detail; tax and trade distortions; capital vintaging) more than double net present discounted costs over the century. Inter-model comparisons of stabilization costs find a similar range, but it is not possible to isolate the structural causes behind cost differences. Broader comparisons of stabilization costs face the additional issue that studies of different vintages assume different policy starting dates, often dates that are no longer realistic given the pace of climate change negotiations. This study can aid in interpretation of estimates and give policymakers and researchers an idea of how to adjust costs upwards as the start of policy is delayed. It also illustrates that models that greatly simplify the realities of modern economies likely underestimate costs.