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. Continue reading

Capitalism or a Climate: Can You Have Both?

by Breanna Sewell

Hans Baer uses his 2008 article, “Global Warming as a By-Product of the Capitalist Treadmill of Production and Consumption—The Need for an Alternative Global System,” to address the causes and effects of climate change and the severity of it all. Baer classifies climate change as “one of the most important issues of the 21st century” along with the growing socioeconomic gap between the rich and the poor, which, he argues, are both caused by our capitalist society. Continue reading

Potential for Tariffs as Climate Change Mitigation: Legal and Economic Analysis

by Sam Peterson

There exist many approaches to solving the problem of climate change, which generally can be delineated in one of two categories: adaptation and mitigation. Adaptive policies include efforts to change human behavior to be compatible with the evolving global climate. Mitigation techniques result from more stringent policies. Both carbon dioxide emission caps and legislation against use of fossil fuels are environmental approaches to mitigation policy. There also exist economic mitigation policies which, by their nature, utilize market forces to dissuade continued use of products harmful to the environment. Cottier (2014) examined the effects imposition of tariffs might have on decreased use of environmentally unfriendly goods and services. They conclude, through use of elasticity measurements, that multilateral action would be effective for pursuing tariff policy, which would lead to an “average 1.4% net reduction in carbon-intensive imports from a 5% increase in tariffs.” The paper examines the World Trade Organization (WTO) legislation surrounding tariffs and concludes that countries can act unilaterally to increase tariffs or act as a group. Continue reading

Pakistan’s Developing Economy in a Warming World

by JP Kiefer

Despite contributing little to greenhouse gas emissions, the poorest countries and people will be negatively affected by climate change the earliest and most severely. This is due to an increased inability to adapt to changes in crop production, water resources, and human health. Akram and Hamid (2015) determined that Pakistan would be one of the countries hit hardest by climate change. Continue reading

Tax Policy Issues in Designing a Carbon Tax

by Makari Krause

Carbon taxes have long been thought of as the most efficient and successful way to decrease GHG emissions and thereby curb climate change. Marron and Toder (2014) examine some of the challenges associated with this approach to carbon mitigation, namely setting the tax rate, collecting the tax, and using the revenue. In order to internalize the GHG emissions externality one must tax those emissions at a rate that brings the social cost in line with the private cost. This is referred to as the social cost of carbon and is the price of carbon that would maximize social welfare. Theoretically this approach seems ideal but there are many difficulties involved with determining the social cost of carbon. Determining the true economic effects of GHG emissions is quite difficult and requires complex modeling. These models operate on a set of assumptions that are controversial in many cases. Leading to a wide range of estimates for the social cost of carbon with a mean of $196/ton and a standard deviation of $322/ton. Another important question to ask when calculating cost is whether that cost will be evaluated on a global or national scale. The costs of climate change and the benefits of mitigation are global but often US policymakers exclude global considerations. Continue reading

How Many Benefits Does Commercial Forestry Provide?

by Emil Morhardt

Forestry economists worry about whether foresters can claim more societal benefits, including offsetting the effects of climate change, from forestry than merely the increased supply of trees; in econ-speak, “…what change in human well-being results from increasing, reducing or qualitatively varying…” the supply of ecosystem services commercial forests provide? Colin Price (2014) addresses this question largely in the abstract by providing an overview of eight general approaches to valuing non-market effects, which, although they break little new ground, provide an extremely clear overview of a generally murky subject. Continue reading