JP

Estimating the potential of U.S. urban infrastructure albedo enhancement as climate mitigation in the face of climate variability

The climate mitigation potential of U.S. urban infrastructure albedo enhancement is explored using multidecadal regional climate simulations. Increasing albedo from 0.2 to 0.4 results in summer daytime surface temperature decreases of 1.5°C, substantial reductions in health-related heat (50% decrease in days with danger heat advisory) and decreases in energy demand for air conditioning (15% decrease in cooling degree days) over the U.S. urban areas. No significant impact is found outside urban areas. Most regional modeling studies rely on short simulations; here, we use multidecadal simulations to extract the forced signal from the noise of climate variability. Achieving a ±0.5°C margin of error for the projected impacts of urban albedo enhancement at a 95% confidence level entails using at least 5 simulation years. Finally, single-year higher-resolution simulations, requiring the same computing power as the multidecadal coarser-resolution simulations, add little value other than confirming the overall magnitude of our estimates.

The Use of Panel Models in Assessments of Climate Impacts on Agriculture

Assessments of climate change impacts on agriculture are increasingly relying on panel models to examine the relationship between agricultural outcomes and weather fluctuations. This article reviews the strengths and weaknesses of such models. We argue that panel models are ideal for assessing climate impacts on agriculture because they use group fixed effects to absorb all time-invariant variation and thus rely on weather deviations from the mean that are random and exogenous. Using this random and exogenous source of variation is crucial to identifying a causal relationship between agricultural outcomes and weather. In addition, the large number of observations offered by a panel data set allows the identification of a nonlinear response function, which is an important step in modeling the effects of climate change, as the response can be highly nonlinear. Despite these strengths of panel models, they may still suffer from omitted variable biases of time-varying variables, such as pollution shocks, which are correlated with the weather shocks. Moreover, because group fixed effects absorb a lot of the signal in the weather variables, the signal:noise ratio might decrease. Thus researchers should be careful when constructing the weather variables in order to avoid having noise in the data that causes downward biases in the coefficients.

The MIT Joint Program on the Science and Policy of Global Change announced today that it has joined Field to Market®: The Alliance for Sustainable Agriculture, a leading multi-stakeholder initiative working to unite the agricultural supply chain in defining, measuring and advancing the sustainability of food, fiber and fuel production in the United States.

MIT Joint Program on the Science and Policy of Global Change joins Field to Market
The economic viability of Gas-to-Liquids technology and the crude oil-natural gas price relationship

This paper explores the viability of a gas-to-liquids (GTL) technology and examines how GTL penetration could shape the evolution of the crude oil–natural gas price ratio. Much research has established the cointegrated relationship between crude oil and natural gas prices in the U.S. The persistently low U.S. natural gas prices in recent years seem to mark a shift in this relationship, and have led some in industry to begin considering investments in GTL capacity in the US. In order to look forward over decades when the underlying economic drivers may be outside of historical experience, we use a computable general equilibrium model of the global economy to evaluate the economic viability of GTL and its impact on the evolution of the crude oil–natural gas price ratio. Our results are negative for the potential role of GTL. In order to produce any meaningful penetration of GTL, we find it necessary to evaluate scenarios that seem extreme. With any carbon cap GTL is not viable. Moreover, even without a carbon cap of any kind, extremely optimistic assumptions about (i) the cost and efficiency of GTL technology and about (ii) the available resource base of natural gas and the cost of extraction, before the technology penetrates and it impacts the evolution of the crude oil–natural gas price ratio.

Informing transparency in the Paris Agreement: the role of economic models

Abstract:

Establishing a credible and effective transparency regime to support the Paris Agreement – broader than its formal ‘transparency framework’ – will be both crucial and challenging. The Agreement provides for review of achievements under national pledges (Nationally Determined Contributions, or NDCs), but much of this information will become available only well after key steps in the launch of this latest attempt to control human influence on the climate. Still, in these early years, information and understanding of individual and collective performance, and of relative national burdens under the NDCs, will play an important role in the success or failure of the Agreement. However, because of the phasing of various steps in the 5-year cycles under the Agreement and the unavoidable delays of two or more years to produce and review government reports, the Climate Convention and other intergovernmental institutions are ill-suited to carry out timely analyses of progress. Consequently, in advance of formal procedures, academic and other non-governmental groups are going to provide analyses based on available data and their own methodologies. The article explores this transparency challenge – using the MIT Economic Projection and Policy Analysis (EPPA) model to construct sample analyses – and considers ways that efforts outside official channels can contribute to the success of the Agreement.

Key policy insights:

  • Because key national decisions are faced before full implementation of the transparency framework, being negotiated by the Ad-Hoc Working Group on the Paris Agreement (APA), urgent attention is needed to activities supporting the regime’s system of pledge and review.

  • Outcomes of these APA negotiations, explored here, including features of reported NDCs and guidelines for tracking progress, will influence the effectiveness of the Agreement in encouraging greater mitigation effort.

  • Whatever the outcome of the APA negotiations, studies by academic and other non-governmental analysis groups will in the near term have a particularly great influence on the transparency objectives of the Agreement.

  • Challenges to the provision by these groups of clear, coherent, credible analyses are explored, leading to recommendations for improved documentation of methods and standards of practice in analysis.

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