1

Estimating the Global Damages from Climate Change

Joel Smith

and

Sam Hitz

Stratus Consulting Inc.

October 23, 2002

2

Objective

• Effort to identify benefits from different greenhouse gas emissions policies key issue is identification of marginal benefits

(avoided damages); are they: constant decreasing reverse sign?

provide useful input for examining long run goals

• Did not address the costs of mitigation

3

Overview

• We surveyed published sectoral studies that quantify the global impacts of climate change. Limited ourselves to global studies; did not examine regional impacts

literature

• Characterized the relationships between climate change and impacts based on studies results increasing impacts parabolic

indeterminate • Identified key factors and assumptions in these studies that

could substantially affect results inclusion and correctness

4

Methodology and Approach

• Global mean temperature (GMT) used as indicator of climate change recognize the many caveats with doing so

• Use equilibrium (generally older studies) and transient (generally newer studies) results

• Used metrics employed by authors of individual studies. No attempt to aggregate.

• Identified and analyzed key factors, assumptions and framework upon which studies were based.

5

Sectors Impacted by Climate Change

Published Studies

• Agriculture

• Sea Level Rise

• Water Resources

• Human Health

• Terrestrial Ecosystems

• Forestry

• Marine Ecosystems

• Biodiversity

• Energy

No Global Studies

• Recreation and Tourism

• Transport

• Building

• Insurance

• Human Amenity

• Mitigation

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Presentation

• Results from agriculture, coastal resources, biodiversity and water sector are representative of these categories.

7

AgricultureRosenzweig et al., 1995

Percent Change in Number of People at Risk of Hunger (2060)

-20

-10

0

10

20

30

40

50

0 1 2 3 4 5 6

°C

% c

han

ge

in n

um

ber

of

peo

ple

Level 2 Farm AdaptationLevel 1 Farm AdaptationLow Temp. No Farm Adaptation

GISS

GFDL

UKMO641 million people at risk in 2060 Reference Scenario

GFDL

GISS

UKMO

Adaptation Level 1:Shifts in planting date (+/- 1 month)Additional application of irrigation water to crops already under irrigationChanges in crop variety to currently available varieties

Adaptation Level 2:Large shifts in planting date (>1month)Increased fertilizer applicationInstallation of irrigation systemsDevelopment of new crop varieties

GISS-A2030

8

AgricultureParry et al., 1999

Percent Change in Number of People at Risk of Hunger

0

10

20

30

40

50

60

0 0.5 1 1.5 2 2.5 3 3.5

°C

Per

cen

t ch

ang

e in

nu

mb

er o

f p

eop

le a

t ri

sk

HadCM2

HadCM3

2020s443 ppmv CO2

2020s441 ppmv CO2

2050s527 ppmv CO2

2050s565 ppmv CO2

2080s642 ppmv CO2

2080s731 ppmv CO2

250 million people at risk of hunger in reference scenario.

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Agriculture Conclusions

• Results suggest initial benefits that eventually decrease and give way to damages as GMT rises, or alternatively, initial damages that decrease before continually rising.

• Some disagreements at lower temperatures, but eventually increasing damages beyond 3-4° C.

• This result agrees with expectation based on underlying biophysical processes.

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Coastal ResourcesFankhauser, 1995.

Cost of Sea Level Rise in OECD Countries

0

500

1000

1500

2000

20 200

Sea level rise by 2100 (cm)

Bill

ion

s $

100

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Coastal ResourcesNicholls et al., 1999

Additional People in the Hazard Zone as a Function of SLR

0

10

20

30

40

50

60

70

0 5 10 15 20 25 30 35 40 45

Sea level rise (cm)

Ad

dit

ion

al p

eop

le (

mill

ion

s)

HadCM2

HadCM3

2020s

2050s

2080s

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Coastal Resources Conclusions

• Damages seem to increase linearly with SLR.

• This result is in line with expectations of monotonically rising costs.

• These costs likely to continue accruing well into the next century, as sea level continues to rise, even after CO2 stabilizes.

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BiodiversityHalpin, 1997.

Percent Change in Eco-Climatic Classes for Biosphere Reserves Compared to Global Average

0

10

20

30

40

50

60

70

80

90

0 1 2 3 4 5 6

°C

% o

f ar

ea w

her

e ec

o-c

limat

ic c

lass

ch

ang

e o

ccu

rs

Biosphere Reserves

Total Terrestrial Area

OSU

GFDL

GISS

UKMO

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Biodiversity

• Eco-climatic classes change within global bio-reserves with greater frequency as GMT rises.

• There is little reason to doubt this result. It would be difficult to argue that climate change will slow the loss of threatened species.

• This is mentioned because even loss of individual species or ecosystems could be motivation for mitigation.

15

Water ResourcesArnell, 1999.

Change in Number of People in Countries in Water Stress

-100

-50

0

50

100

150

0 0.5 1 1.5 2 2.5 3 3.5

°C

Nu

mb

er o

f p

eop

le (

mill

ion

s)

HadCM2/GGax

HadCM3/GGa1

2020s

2050s

2080s

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Water ResourcesArnell, 1999.

Difference Between Total Population in Countries Where Water Stress Increases and Countries Where Water Stress Decreases

-3000

-2500

-2000

-1500

-1000

-500

0

500

1000

1500

0 0.5 1 1.5 2 2.5 3 3.5

°C

Nu

mb

er o

f p

eop

le (

mill

ion

s)

HadCM2/GGax

HadCM3/GGa1

2020s2050s

2080s

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Water Resources Conclusions

• No clear relationship between climate change and impacts on water resources.

• Averaging at the regional or country level presents problems. Basin level is more appropriate.

• We think there should be increasing damages with increasing GMT. Not (yet) borne out by published literature.

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Aggregate Studies

-11

-10

-9

-8

-7

-6

-5

-4

-3

-2

-1

0

1

2

3

0 1 2 3 4 5 6

Global Mean Temperature (°C)

Percen

t o

f W

orld

GD

P))

)

Mendelsohn, output

Nordhaus, output

Nordhaus, population

Tol, output

Tol, equity

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Table 6. Summary of sectoral damage relationships with increasing temperature.

Sector Increasing damagesa Parabolic Unknown

Agriculture X

Coastal X

Water X

Health X

Terrestrial ecosystem productivity X

Forestry X?b

Marine ecosystems X?c

Biodiversity X

Energy X

Aggregate X

a. Increasing damages means there are damages with small increases in GMT, and the damages increase with higher GMTs. We are unable to determine whether the damages

increase linearly or exponentially with GMT. b. We believe this is parabolic, but with only one study it is difficult to ascertain temperature

relationship, so there is uncertainty about this relationship. c. This relationship is uncertain because there is only one study on this topic.

Sectoral Damage Relationships

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Limitations

• Did not consider: impacts of temperature changes in excess of 1.4 to 5.8° C

range considered likely by Houghton et al.,2001 change in climate variability impacts due to long term (i.e. post 2100) climate change potential large scale singular events (e.g. collapse of THC or

WAIS) interaction among impacts on different sectors (e.g. water

and agriculture) ancillary benefits and proactive adaptation.

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Limitations

• Also: Adaptation generally handled with simplistic

assumptions can over or underestimate impacts

Assumptions about population and development not consistent development can make substantial difference in

vulnerability of societal sectors

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Conclusions

• In all sectors, the results point to increasing damages beyond a temperature range of 3-4°C.

• Below this critical temperature range, the picture is much less clear. In some sectors damages may accrue immediately and continue to grow. In others, benefits may eventually give way to damages or initial damages may decrease before steadily increasing.

• Aggregate studies we examined, tend to confirm this basic conclusion.

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Final Caveats

• Changes in the key assumptions and simplifications upon which each of the studies depend could either lower or raise this critical temperature range.

(e.g. adaptation, development, treatment of variability, interaction among sectors, long-term temperature change or changes in the climate system)

• We should expect significant variation among regional results. The critical temperature range we identify could be quite different depending on the particular combination of region and sector.