The Impacts of Climate Change: An Overview MS&E 290 Public Policy Analysis March 2, 2004

Cost/Benefit Modeling Approach: Balancing the Costs of Controlling Carbon Emissions Against the Costs of the Climate Ipacts They Cause Value/Cost of Emissions Reductions Carbon Emissions Marginal Cost of Climate Impacts Marginal Cost of Emissions Control

Agriculture Forestry Sea Level Rise Water Supply Energy Consumption Fisheries Extreme Events/Insurance Unmanaged Eco- Systems –Terrestrial –Marine Human Health* Bio-Diversity* Wildlife Recreation* Amenities MARKETNON-MARKET *Some Market Components Areas Where Climate Change Impacts Are Anticipated

Components of Impact Assessments System Exposure –Extent to Which Climate Will Change Where System Is Sensitivity –How System Responds to Changes in Climate Adaptability –Extent to Which System Can Adjust to Those Changes Vulnerability –Damage or Harm Given Exposure, Sensitivity and Adaptability The Parable of the “Dumb Farmer”

An Understudied Policy Option: Anticipatory Government Instigated Adaptation Climate is Going to Change in Any Case In Some Cases Adapting May be Cheaper and More Effective Than Mitigating Helping People Adapt to Current Climate Variability May be a Very Good First Step

Key Challenges Faced in Projecting Impacts Projecting Regional Climate –Temperature –Precipitation –Variability Projecting Baseline Conditions Transient Versus Equilibrium Impacts Factoring In Adaptation Valuing Non-Market Impacts

Approaches to Valuing Climate Change Impacts Structural Models –Output = fcn.(Inputs) Aggregate Statistical Models –Use Variation Across Regions Travel Cost Models –Value of Recreation > Cost of Doing It Contingent Valuation Surveys –Use of Questionnaires to Assess Values

Key Determinants of the Costs of Climate Impacts Value of Emissions Reductions Carbon Emissions More Sensitivity to Rate of Change More Activity in Sector More Adaptation More Technological Change Other Important Factors Vulnerability to Variability

IPCC Synthesis into Causes for Concern Risks to Unique and Threatened Systems Risks from Extreme Climate Events Distribution of Impacts Aggregate Impacts Risks from Future Large-Scale Discontinuities

KEY FINDINGS of National Climate Change Impact Assessment Report 1. Increased warming 2. Differing regional impacts 3. Vulnerable ecosystems 4. Widespread water concerns 5. Secure food supply 6. Near-term increase in forest growth 7. Increased damage in coastal and permafrost areas 8. Adaptation determines health outcomes 9. Other stresses magnified by climate change 10. Uncertainties remain and surprises are expected