Probability and Cost Estimates for Climate Change

by Sam Peterson

As the scientific consensus regarding the existence of climate change has grown, two separate, research communities have delineated differences in experimentation and modeling of climate change costs. The “integrated assessment community” has extensively examined the influence of “technological and socio-economic uncertainties on low-carbon scenarios,” while the modeling community has focused on understanding the “geophysical response of the Earth system to emissions of greenhouse gases.” Rogelj et. al. (2013) unite these two seemingly mutually exclusive endeavors by generating “distributions of the costs associated with limiting transient global temperature increase to below specific values, [and] taking into account uncertainties in four factors: geophysical, technological, social and political.” The study concludes that political choices that delay mitigation have the largest effect on the cost–risk distribution, closely followed by geophysical uncertainties.

In the study, the group generated cost distribution estimates by combining mitigation cost estimates with probable temperature projections, but did not account for avoided climate damages due to mitigation effects. In the absence of mitigation measures, the probability of limiting global average temperature increases to less than 2°C is “essentially zero,” but with a carbon tax of $40 per metric ton of carbon dioxide equivalent emissions, that likelihood increases to 66%, denoted “likely” by the IPCC ($20 per ton of carbon dioxide equivalent emissions translates to 0.8%–1.3% of world GDP. The probability of staying below a given temperature limit is asymptotic for higher carbon taxes, as higher carbon prices help further reduce emissions later in the 21st century, but only affect temperatures after peaking. In the most pessimistic scenario, where carbon capture and storage (CCS) technologies are hypothesized as completely unavailable, the probability of staying within a 2°C margin is only 50%. CCS is the most important factor in keeping the temperature increases below 2°C, as without it, no level of carbon tax will be able to control usage. The sensitivity analysis does note that if mitigation action is delayed, governmental expenditures on the problem will have less effect due to the constrains of the model. The findings of the study conclude that for a hypothesized delaying strategy used by countries currently (offsetting the next climate change agreement until 2020) is only effective if there is continued use of demand-side (consumer side) limitations on carbon usage. This leads to the logical conclusion that political factors are the most important of the four posited in the study, as varying the timing of climate change political attacks has drastic effects on the viability of keeping global temperature increases below 2°C. In conclusion, continued stalling by governments for more than two decades will lead to a complete inability to reach the 2°C temperature goal.

 

 

Rogelj, J., et al. (2013). “Probabilistic cost estimates for climate change mitigation.” Nature 493(7430): 79-83.

 

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