The current misplaced focus on short-term climate policies is a product both of domestic political exigencies and badly flawed technical analyses. A prime example of the latter is a recent U.S. Department of Energy study, prepared by five national laboratories. The 5-Labs study assumes — incorrectly — that technical solutions are readily at hand. Worse, advocates of short-term emissions targets under the Framework Convention on Climate Change are using this study to justify the subsidy of existing energy technologies — diverting resources from the effective long-term technology response that will be needed if the climate picture darkens.

This paper estimates the value of international emissions trading, focusing attention on a here-to-fore neglected component: its value as a hedge against uncertainty. Much analysis has been done of the Kyoto Protocol and other potential international greenhouse gas mitigation policies comparing the costs of achieving greenhouse gas emission targets with and without trading. These studies often show large cost reductions for all Parties under trading compared to a no trading case. We investigate the welfare gains of including emissions trading in the presence of uncertainty in economic growth rates, using both a partial equilibrium model based on marginal abatement cost curves and a computable general equilibrium model that allows consideration of the interaction of emissions trading with existing energy taxes and changes in terms of trade. We find that the hedge value of international trading is small relative to its value in reallocating emissions reductions when, as in the Kyoto Protocol, the burden-sharing scheme does not resemble a least-cost allocation. The Kyoto Protocol also allocated excess allowances to Russia, so-called "hot air," and much of the value often attributed to emissions trading stems from other Parties having access to these extra allowances, which has the effect of lowering the aggregate emissions target. We also find that the effects of preexisting tax distortions and terms of trade dominate the hedge value of trading. We conclude that the primary value of emissions trading in international agreements is as a burden-sharing or wealth transfer mechanism and should be judged accordingly.

This study follows a similarly structured analysis on an uncoupled version of the same model presented in Part I. Since we are dealing with a coupled model, a direct representation of the radiative forcing is possible, because the main atmospheric physical processes responsible for freshwater and heat fluxes are formulated separately. Each perturbation to the initial equilibrium is characterized by the total radiative forcing realized, by the rate of increase, and by the North-South asymmetry. Although only weakly asymmetric or symmetric radiative forcings are representative of physically reasonable conditions, we consider general asymmetric forcings, in order to get a more complete picture of the mathematical properties of the system. The choice of suitably defined metrics allows us to determine the boundary dividing the set of radiative forcing scenarios that lead the system to equilibria characterized by a THC pattern similar to the present one, from those that drive the system to equilibria where the THC is reversed. We also consider different choices for the atmospheric transport parameterizations and for the ratio between the high latitude to tropical radiative forcing. We generally find that fast forcings are more effective than slow forcings in disrupting the present THC patterns, forcings that are stronger in the northern box are also more effective in destabilizing the system, and that very slow forcings do not destabilize the system whatever their asymmetry, unless the radiative forcings are very asymmetric and the atmospheric transport is a relatively weak function of the meridional temperature gradient; in this latter case we present the analysis of the bifurcations of the system. The changes in the strength of the THC are primarily forced by changes in the latent heat transport in the hemisphere, because of its sensitivity to temperature that arises from the Clausius-Clapeyron relation. © 2005 American Meteorological Society

Stone chapter abstract: We identify three major areas of ignorance which limit predictability in current ocean GCMs. One is the very crude representation of subgrid-scale mixing processes. These processes are parameterized with coefficients whose values and variations in space and time are poorly known. A second problem derives from the fact that ocean models generally contain multiple equilibria and bifurcations, but there is no agreement as to where the current ocean sits with respect to the bifurcations. A third problem arises from the fact that ocean circulations are highly nonlinear, but only weakly dissipative, and therefore are potentially chaotic. The few studies that have looked at this kind of behavior have not answered fundamental questions, such as what are the major sources of error growth in model projections, and how large is the chaotic behavior relative to realistic changes in climate forcings. Advances in computers will help alleviate some of these problems, for example by making it more practical to explore to what extent the evolution of the oceans is chaotic. However models will have to rely on parameterizations of key small-scale processes such as diapycnal mixing for a long time. To make more immediate progress here requires the development of physically based prognostic parameterizations and coupling the mixing to its energy sources. Another possibly fruitful area of investigation is the use of paleoclimate data on changes in the ocean circulation to constrain more tightly the stability characteristics of the ocean circulation.

Prinn chapter abstract: The global atmosphere is a chemically complex and dynamic system, interacting both internally, mostly within the troposphere and stratosphere, and with the oceans, land, and living organisms. Its composition is changing today, and has also changed markedly over the last 400,000 years. Current understanding of this complex system resulting from recent observations, theory, and laboratory and modeling studies is reviewed. Also, results are presented from the Integrated Global System Model (IGSM). This is a coupled model of economic development, atmospheric chemistry, climate dynamics and ecosystem processes that explores possible future changes in atmospheric composition and climate. The results of an uncertainty analysis involving hundreds of runs of the IGSM imply that, without specific mitigation policies, the global average surface temperature may rise between 1.0 and 4.9 °C from 1990 to 2100 (95% confidence limits). Polar temperatures, absent policy, are projected to rise from about 1 to 12 °C (95% limits) with obvious great risk for high latitude ecosystems and ice sheets at the high end of this range. Analysis of the Kyoto Protocol, and a more stringent climate mitigation policy, shows the difficulties in accounting simply for the effects of other greenhouse gases relative to carbon dioxide. Also, the greatest effect of these policies is to lower the probability of extreme changes as opposed to lowering the medians.

Jacoby chapter abstract: If policymakers and the public are to be adequately informed about the climate change threat, climate modeling needs to include components far outside its conventional boundaries. An integration of climate chemistry and meteorology, oceanography, and terrestrial biology has been achieved over the past few decades. More recently the scope of these studies has been expanded to include the human systems that influence the planet, the social and ecological consequences of potential change, and the political processes that lead to attempts at mitigation and adaptation. For example, key issues—like the relative seriousness of climate change risk, the choice of long-term goals for policy, and the analysis of today's decisions when uncertainty may be reduced tomorrow—cannot be correctly understood without joint application of the natural science of the climate system and social and behavioral science aspects of human response. Though integration efforts have made significant contributions to understanding of the climate issue, daunting intellectual and institutional barriers stand in the way of needed progress. Deciding appropriate policies will be a continuing task over the long term, however, efforts to extend the boundaries of climate modeling and assessment merit long-term attention as well. Components of the effort include development of a variety of approaches to analysis, the maintenance of a clear division between close-in decision support and science/policy research, and the development of funding institutions that can sustain integrated research over the long haul.

© 2004 International Union of Geodesy and Geophysics and the American Geophysical Union

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