Uncertainty Treatment in Integrated Assessment Modelling A Workshop of the UN/ECE TFIAM-IIASA January 24/ Comments from an Oil Industry Perspective L. White, CONCAWE

Uncertainties in IAM: Key Concerns for Industry Overall IAM provides framework for developing target driven legislation using principles of sound science and cost-effectiveness-In principle strongly supported by Oil IndustryOverall IAM provides framework for developing target driven legislation using principles of sound science and cost-effectiveness-In principle strongly supported by Oil Industry Approach offers policy makers direct connection between “complex science” and “practical policy”Approach offers policy makers direct connection between “complex science” and “practical policy” This surely places significant societal responsibility on the scientific community to ensure effects of uncertainties are also expressed in terms implications for “practical policy”This surely places significant societal responsibility on the scientific community to ensure effects of uncertainties are also expressed in terms implications for “practical policy” Communication and transparency key to confidence in policy based on IAMCommunication and transparency key to confidence in policy based on IAM Industry concern over uncertainties focuses on design of robust policy: + Uncertainties more significant when policy measures are at the steep part of cost curve + Single time horizon for policy guidance of concern in changing world + Sectoral burden sharing more vulnerable to single horizon year than national burden sharing e.g., dynamic in changeover of vehicle fleets, changes in energy patterns + How can IAM provide a policy surface rather than policy point? + Large base case changes pose the question “Will the science of the past/present hold for the new policy horizon year(s)?”Industry concern over uncertainties focuses on design of robust policy: + Uncertainties more significant when policy measures are at the steep part of cost curve + Single time horizon for policy guidance of concern in changing world + Sectoral burden sharing more vulnerable to single horizon year than national burden sharing e.g., dynamic in changeover of vehicle fleets, changes in energy patterns + How can IAM provide a policy surface rather than policy point? + Large base case changes pose the question “Will the science of the past/present hold for the new policy horizon year(s)?” Overall industry concern “Will such uncertainties result in regret investment?”Overall industry concern “Will such uncertainties result in regret investment?”

Comparison of Predicted Ozone Compliance (99 Percentile) for 1990 Base Case Auto Oil I vs NECD (1-Hour Data for EU-15) Based on Detailed Results From NMI EMEP Simulations