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ClimateAnalyticsgGmbHSupportingsciencebasedpolicytopreventdangerousclimatechangeenablingsustainabledevelopment

Friedrichstraße231/HausB10969Berlin/Germany

T/+49(0)30259229520W/www.climateanalytics.org

November2015

Impacts of low aggregate INDCs

ambition

Research commissioned by OXFAM

Technical summary FlorentBaarschTabeaLissner,Carl-FriedrichSchleussner,JessieGranadillos,KellydeBruin,MahéPerrette,MichielSchaeffer,BillHare

P.2

1 ClimateActionTrackerGlobalEmissionPathways.................................................................................32 Sea-LevelRise.........................................................................................................................................5

2.1 MethodandData.............................................................................................................................53 Agriculturalyieldanalysis.......................................................................................................................7

3.1 Assessmentofagriculturalproductionlosses.................................................................................74 Adaptationcostsandmacroeconomicdamage.....................................................................................9

4.1 Summaryofresults..........................................................................................................................94.2 DoesAD-RICEoverorunder-estimatemacroeconomicdamageandadaptationcosts..................9

4.2.1 Scenariosused..........................................................................................................................94.2.2 Adaptationcosts.....................................................................................................................104.2.3 Macroeconomicdamage........................................................................................................10

4.3 SpecificationsanddescriptionoftheAD-RICEmodel...................................................................115 References............................................................................................................................................15

P.3

Technicalbackgroundandsummaryofmethods

1 ClimateActionTrackerGlobalEmissionPathways

TheClimateActionTracker(CAT)assessesemission-reductionpledgesandemissionsimpliedbycurrentpolicyportfoliosforthelargestemittersandcalculatesglobalemissionsprojections(publiclyavailableonCATwebsite)andestimates2100globalmeantemperaturerisebasedontheseassessments.Thethreemaincasesaredescribedbelow:CurrentPolicyProjections:TheCATassessesthecurrentlyimplementedpoliciesof32countries,whichcoveredabout80%of global emissions in2010. Theassociatedemissionsare calculateduntil 2030.Ahighandalowestimatearegiventocovertheuncertainty.Thepathwaypresentedhereisthemiddleofthehighandlowcase.CountriesnotcoveredusethePRIMAP4baseline(PotsdamReal-timeIntegratedModel for probabilistic Assessment of emissions Paths (PRIMAP) 2014). Details on the current policyprojectionsareavailableonlineat(ClimateActionTracker2014a).Unconditional 2020/2030 Pledges: This pathway incorporates the 2020 and 2030 emission-reductionpledges.Whereconditionalandunconditionalpledgesexistweusetheunconditionalpledge.Countrieswithoutapledgeusethecurrentpolicyprojectionpathway.Detailsonthepledgepathwaymethodologyareavailableatwww.climateactiontracker.org(ClimateActionTracker2014b).Long-Term Targets: This pathway incorporates all pledges including the 2050 long-term targets. Ifconditionalandunconditionaltargetsexist,theunconditionaltargetsareused.Countrieswithoutalongtermpledgeusethe2030pledgepathwayandextensionbeyond2030(ClimateActionTracker2014b).ThepathwaysareshowninFigure1.TheyaretakenfromtheOctober2015CATupdate.Fordetailssee Gütschowetal.(2015).ThefullmethodisexplainedontheCATwebsite1.

1http://climateactiontracker.org/methodology/18/Global-pathways.html

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Figure1:ClimateActionTrackerglobalpathways.Allpathwaysare taken fromtheOct2015CATbriefing (Gütschowetal.2015).

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2 Sea-LevelRise

2.1 MethodandDataThemethodologyappliedhereisconsistentwiththeIPCCAR5reportandbasedonthesameunderlyingdata, except the projections for theAntarctic Ice Sheet. For risks to theAntarctic Ice Sheet themorerecent study by Levermann et al. (2014) is used instead, which is based on process-based ice-sheetmodelsimulations(Bindschadleretal.2013)andallowsaccountingforoceanmeltingundertheshelfforvariouswarminglevels.Bycontrast,intheIPCCAR5,meltingunderAntarctica’siceshelvescouldnotbecalculated as a function of varying warming levels and was thus taken as constant regardless of theemissionscenario,bylackofabetterhypothesis.Projections for thermal expansion and mountain glaciers are based on Perrette et al. (2013), usingMAGICC6surfaceairtemperature(leftpanel)andoceanheatuptakeprojections(notshown)as input.The Greenland Ice Sheet follows Fettweis et al. (2013), scaled up by 20% to account for dynamicacceleration of ice streams (as in Hinkel et al. 2014). Note that contribution from land-water is alsoincluded (~4 to 9cm in 2100). Calculations are based on 1000 Monte-Carlo samples, (half of) 90%uncertaintyrangeisshownonthefigures.

Figure2:Temperaturepathways(left)andsea-levelriseabove2000(right)forglobalmeantemperaturepathwaysreachingbetween1.5°Cand6°Cby2100.Alllinesrepresentmedianprojections.Shadedareasontherightindicatethedistancefrommedianto5thpercentileforlowestscenario(blue),respectivelymedianto95thpercentileforthehighestscenario(red).

• ProjectedSLRrangesvaryfrom0.41m(0.33mto0.55m)forthe1.5°Cpathwayto0.85m(0.68m

to 1.13m) for the 6°C pathway (5th to 95th ranges), which means a doubling in sea-level risealreadyby2100

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• While the rangeof sea level riseby2100between thedifferentpathways is relatively smallercompared to temperature (2 times higher for SLR vs. 4 for GMT), the multi-centennialcommitmentdiffers substantially (not shownon the figure), ashintedbya larger range in theratesofSLRrisein2100andthelargedifferenceinrateofchangeby2100,withrateofSLRby2100inthe6°Cscenarioapproaching4timestherateofSLRinthe1.5°Cscenario.

• Basedonmodelling studies aswell as Paleo-evidence, an averageof 2.3mSLRperDegreeofwarming is estimated on amulti-centennial tomillennial time scale (Anders Levermann et al.2013)

• Finally,notethat21stcenturyestimatesdonotaccountfortheriskofrapiddestabilizationoftheWest Antarctica Ice Sheet, or a more significant contribution from the Greenland Ice Sheet,whose riskcannotbeconfidentlyestimated.Apanelofexperts recentlyestimateda riskofasmuchas1.5msealevelriseby2100(Hortonetal.2014),consistentwithearlierexpertestimates(BamberandAspinall2013)

Notealsothatwhileglobalsealevelrisegenerallyprovidesagoodimpressionofthescaleoftherelatedimpacts, local oceanographic, Earth’s rotational-gravitational and solid Earth processes exist thatmayredistribute sea level rise differently among world’s coastal regions (roughly by 10-15% relatively toglobalmean).Additionally,theEarthcrustmayundergolocaluplift(e.g.duetotectonic)orsubsidence(e.g.duetoundergroundminingorgroundwaterpumping; lackofsedimenttransport indeltaregions)whichtogetherdeterminethe“relativesealevelrise”actuallyfeltatthecoast.Last,possiblechangesinstorminesswill also need to be taken into account to determine how sea level and storm surgeswillaffectpeople’slifeandlocaleconomy.Forcompleteconsistency,sea-levelrisewascalculatedfortheCATscenariospreparedforOxfam.Bothglobalwarmingandassociatedsea-levelriseprojectionsfortheCATscenarioswereusedforcalculationsofdamagesandadaptationcosts,asexplainedinsection4.

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3 Agriculturalyieldanalysis3.1 AssessmentofagriculturalproductionlossesTheISI-MIParchivecontainsdataonagriculturalyieldsofthefourmaincropsmaize,rice,wheatandsoy,basedon7globalagriculturalmodels(AgM),drivenby5GCMs.Ofthe7AgMs,only6provideestimatesforrice.WithregardtotheeffectsofCO2fertilization,allmodelsprovidecalculationswithassumptionson the CO2 effect,while for someAgMnoCO2 runs are limited to oneGCM. Finally, the temperaturerangemodelledbytheGCMsdiffers.Asaresult,between23and12modelcombinationswereusedtoassessrisksofagriculturalproductionlosses.

Globalagriculturalmodelsprovideestimatesofcurrentandfutureyieldsatagriddedresolutionof0.5°.Themodelsprovideestimatesofyields forallgridcells, inwhichproduction ispossible,allowing foramaximumpotential expansion of croplands. In order to assess reductions of crop yields from currentproduction patterns, we extract the current production areas, using year 2000 areas for each crop(Portmann,Siebert,andDöll2010).Aswealsousetheseareasforprojectionsofyields,theresultsareconservative,astheydonotallowforpotentialcroplandexpansion.

TheinfluenceofelevatedCO2concentrationsonplantgrowthisatopicofdebate.Whilestudiessuggestan increase in productivity for some crops as a result of CO2 fertilization, large uncertainties remain,especiallywithregardtotemperaturesensitivityaswellasnutrientandwaterlimitations.Additionally,theeffectofclimateextremessuchasheatwaves(Porteretal.2014),iffullyincludedintheprojections,maycounteract thepotentialgainsbyCO2 fertilization. Inorder toestimate risks to foodsecurity inabalanced manner, the present analysis focuses on those model runs not including CO2 fertilization(noCO2).

Additionalimportantsourcesofuncertaintyincludesoil,weather,andmanagementinputs;uncertaintiesof model parameters; and uncertainties related to model formulation (see e.g.: www.agmip.org fordetailedinformationonglobalagriculturalmodels).Inordertoprovideregionalestimatesofchangesinagricultural production,we draw on the regional differentiation used in the AD-RICEmodel. For eachcrop,meanannual cropyieldswithin the12 regionsareassessed.Changes in cropyields relative toareference period (1986-2005) are assessed at incremental increases in GMT of 0.5° relative to pre-industrial temperature (1.5°, 2.0°, 3.0° as the closest increment to current INDC projections, 3.5° asclosestincrementtocurrentpolicyprojections).Probabilitiesofyieldlossrefertotherangeofmodellingresults available frommodel intercomparison efforts and probability numbers refer to the number ofmodelsprojectingtherespectivechange.

AnalysisTheanalysisisconductedforthe12regionsthathavebeendefinedforthepurposeoftheRICE/AD-RICEmodels,seetablebelowforanoverview,detailscanbefoundathttp://www.econ.yale.edu/~nordhaus/homepage/documents/RICE_042510.xlsm.Foreachregion,allavailableimpact-modelclimate-modelcombinationsareusedtoshowthepotentialrangeofchange,depictingthepercentchanceinyieldsbetween

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a. Refand1.5°Ctemperatureincreaseb. Refand2.0°Ctemperatureincreasec. RefandINDCprojectionsd. Refandpolicyprojections

Additionally,datatoassessthegapsbetweentherespectivelevelsareprovided

a. 1.5°CtemperaturelimitversuscurrentINDCpledgesb. 2°CtemperaturelimitversuscurrentINDCpledgesc. 1.5°Ctemperaturelimitversuscurrentpolicypledgesd. 2°Ctemperaturelimitversuscurrentpolicypledges

Outputanddataprovided:• csvtableswiththeending‘lower_likely_range’providethelowerendofthelikelyrange,as

definedbytheIPCC(66%).Mapsshowthecorrespondingvaluesforeachregion.• csvtableswiththeending‘all_likelyvalues’providethevaluesforthe90-percentile(5-95%

range)likelyrange(17-83%range)andthemedian.Annexplotsprovideanoverviewofthesevalues(bars:likelyrange,whiskers90-percentile)

OverviewofAD-RICEregionsRegionCode RegionName1 US2 EU3 Japan4 Russia5 Eurasia6 China7 India8 MiddleEast9 Africa10 LatinAmerica11 OtherHighIncome12 OthAs

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4 Adaptationcostsandmacroeconomicdamage

4.1 SummaryofresultsTable 1. Summary of adaptation costs and macroeconomic damage in the RCP2.6, CAT INDC2.7°C, INDC3.0°C and CAT.(CurrentPolicyProjectionsscenariosusingAD-RICEmodel)

Global Developingcountries

RCP2.6 INDC2.7°C INDC3°C* CPP RCP2.6 INDC INDC3°C* CPP

Adaptation costs (inUS$2012billion2) 2030 $271,91 $327,07 $333,93 $343,94 $204,96 $239,29 $243,14 $248,75 2050 $659,64 $982,00 $1.056,55 $1.165,19 $520,56 $745,90 $794,90 $866,29Macroeconomicdamage(in%ofGDP) 2030 0,45% 0,48% 0,48% 0,49% 0,57% 0,61% 0,61% 0,61% 2050 0,69% 1,02% 1,10% 1,22% 0,84% 1,22% 1,31% 1,45%Macroeconomicdamage (in US$ 2012billion) 2030 $640,16 $686,56 $690,10 $695,27 $399,92 $426,33 $428,42 $431,46 2050 $1.581,76 $2.326,72 $2.512,29 $2.782,71 $1.069,22 $1.552,29 $1.673,06 $1.849,04

*INDC3°C(RCP6.0interpolated)TheinterpolationconsistedinestimatingtheadaptationanddamagecostsintheINDC3°Cscenariofromthe adaptation and damage costs in the INDC 2.7°C and Current Policy Projections scenarios. Theestimationisderivedfromthetemperaturedeviationbetweenthesethreescenariosattheendofthe21st century, i.e. 2.7°C, 3.1°C and 3.6°C respectively in the INDC 2.7°C, INDC 3.0°C proxy and CurrentPolicyProjectionsscenarios,respectively.

4.2 DoesAD-RICEoverorunder-estimatemacroeconomicdamageandadaptationcosts

4.2.1 ScenariosusedTheassessmentsofadaptationandmacroeconomiccostsarebasedontheIPCCRCP2.6(referredtoinas“below2°Cdegreescenario”)andtheIPCCRCP6.0temperaturepathways.TheIPCCRCP2.6scenariowasassessed by IPCC in AR5 as holding warming “likely” below 2°C and also in our carbon-cycle-climatemodel leads warming ‘likely’ below 2°C, with a central estimate of about 1.7°C degrees globalmeantemperatureincreaseby2100.TheRCP6.0scenarioisprojectedtoleadtoabout3.1°Cdegreeincreaseby2100(centralestimate).TheRCP6.0scenariowasusedasaproxy for theaggregate INDCsscenarioselectedbyOxfam.Macroeconomicandadaptationcosts intheINDC3°Cdegreesproxyscenariowere2Alldollarvaluesareexpressedin2012dollars.AD-RICEoutputs,inUS$2005dollars,wereconvertedusingdollardeflatorvaluesfromtheOECDdatabase.

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interpolatedtofitRCP6.0temperaturedeviationfor2030and2050betweenthesescenariosusingcostestimatesfromtheCATINDCscenario(leadingto2.7°Cdegreesbytheendofthecentury)andtheCATCurrentPolicyProjectionsscenario (about3.5°Cdegreesby2100).Thecostestimates intheCAT INDCscenario and CAT Policy Projections scenario were calculated using the AD-RICE2012 model (seespecification in section below). Table 1 summarizes results for CAT INDC 2.7°C degrees (INDC), CATCurrentPolicyProjections(CPP)andINDC3°Cdegrees.

4.2.2 AdaptationcostsWithrespecttoadaptationcosts,theestimatesfromtheAD-RICEmodelfordevelopingcountriesareinlinewithUnitedNationsEnvironmentProgramme2014AdaptationGapreport(AnneOlhoffetal.2014),includingthebottom-upestimatesinthelatter.UNEPestimatesadaptationcostsbetweenUS$280and500 billion dollars by 2050 (in 2005 dollar value – or about US$570 billion in 2012 dollar value) fordevelopingcountries,foratemperaturescenarioofabout2°Cdegrees.Inthecurrentpublication,usingtheAD-RICEmodel,adaptationcostsfordevelopingcountriesinascenarioleadingtobelow2°Cdegrees(IPCCRCP2.6)by2100areestimateataboutUS$520billionin2050(in2012dollarvalue), inthesamebutupperrangeasUNEP’sbottom-upassessment.

4.2.3 MacroeconomicdamageThere exists a wide range of methodologies to estimate macroeconomic damage, while estimatingadaptation costs at the regional level reliesonmostly twoapproaches: integratedassessmentmodels(IAMs)andabottom-upassessmentofcountryandsectoralstudies(nextsection).Accordingtoarecentpublication in Nature (Burke, Hsiang, and Miguel 2015), existing Integrated Assessment Models(DICE2010,PAGE09andFUND3.8)largelyunder-estimatefutureclimate-changeinducedmacroeconomiccosts.While IAMestimateaglobaldecrease inGDPpercapitabetween0and10percentwhenglobalmean temperature increase reaches 5°C degrees above pre-industrial levels, the new approachdevelopedbyBurke,Hsiang,andMiguel(2015)estimatesdecreaserangingfrom25to75percentatthesametemperature level.Thevalueandsignificanceof thesenewestimatesare tobe interpretedwithcareas theystill tobe testedandprovenbyadditional researchandpublications.TheFigure3below,extracted from the above mentioned publication summarizes these estimates. Owing to these newresults, theDICEmacroeconomicdamageestimatesonwhichtheAD-RICEmodel isbasedarepossiblyveryconservative.Hitherto,noIAMshaveintegratedthesenewdamagefunctionsintheirspecifications.Asaconsequence,itisnotpossibleyettorelatethesenewestimatestofutureadaptationcosts.

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Figure3ComparisoninpercentagechangeinGDPpercapitaasafunctionoftemperaturechangeusingestimatesfromtheFUND3.8,PAGE09andDICE2010modelsandnewestimatesfromBurke,Hsiang,andMiguel(2015).GraphicextractedfromBurke,Hsiang,andMiguel(2015).

4.3 SpecificationsanddescriptionoftheAD-RICEmodel

In thisannexashortdescriptionof theAD-RICE2012modeland itscalibrationaregiven. AD-RICE isaRamsey-typegrowthmodelwithexplicitrepresentationofadaptationtoclimatechange(K.C.deBruin,Dellink,andTol2009;K.deBruin,Dellink,andAgrawala2009).TheAD-RICE2012model(KellydeBruin2014) has been developed based on the RICE2010 (W. Nordhaus 2011) model. The AD-RICE modelextendstheRICEmodeltoincludeadaptationpolicyvariables.

TheAD-RICE2012modelisanIntegratedAssessmentModel(IAM),whereeconomicproductionleadstoGHGemissions.Inthismodel,industrialCO2istheonlyendogenousGHG.TheamountofindustrialCO2emissionsperunitofoutputisassumedtodecreaseovertimeduetotechnologicaldevelopment.InturnCO2emissionsincreasethestockofCO2intheatmosphere,resultinginclimatechange.Thoughclimatechange includes a multitude of phenomena (such as changes in precipitation, changes in weathervariability,increasedextremeweather),itisrepresentedbychangesinatmospherictemperatureinthismodel. Overall climate change negatively affects society and the economy through various differentimpacts.GDPimpactsduetoclimatechangearemodelledasapercentagedecreaseinproductionasafunction ofmean atmospheric temperature change compared to 1900. Investments inmitigationwillreduce CO2 emissions per unit of output at a cost, which decreases over time due to technologicalchange.Byadjustmentstotheeconomy(i.e.adaptation)initialclimatechangedamages(grossdamages)canbereducedtoresidualdamagesatacost.

Themodelcomprises12regions,whichtogetherrepresenttheglobe.Theregionsincludedinthemodelareas follows:USA,EU, Japan,OtherHigh Incomeregions(OHI), India,China,Africa,Russia,EuropeanAsia(EUASIA),Asia,LatinAmerica(LATAM)andtheMiddleEast(ME).

AD-RICE2012 is a forward-looking Ramsey growth model, where regional utility is maximized (givenregionalendowments)overthemodelhorizon.Themodelhastimeperiodsof10yearsandhasatime

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horizon of 300 years. Utility is a function of consumption per capita discounted over time and overincome per capita (richer generation’s consumption creates less utility than poorer generation). Themodelfindstheoptimalbalanceofcapitalinvestments,mitigationinvestments,adaptationinvestments,adaptationcostsandconsumptiontomaximizeutility.

The climate change damage estimates in the AD-RICE2012 model replicate the net damages of theRICE2010model.ThedamagesoftheRICE2010modelhavebeencalibratedbasedon(W.D.Nordhaus2007; Tol 2009; IPCC 2007). The impacts generally considered in IAM and here as well are: healthimpacts, agricultural impacts, effects on leisure activities, water resources, energy and sea level rise.Giventheobviousdatarestrictions,this list isnotcomprehensiveandmanyimpactsofclimatechangeremainun-quantified.TheAD-RICEmodelusesastylizeddamagefunctionwheretemperatureincreaseslead to direct decreases in production. A more detailed description of damages would include aproductionfunctionapproach,whichincludestheeffectsonproductioninputsanddirectutilityeffects.There remains a large degree of uncertainty regarding the damages associated with climate change,whereparticularlymanyimpactshavenotyetbeenidentifiedorquantified.Thequantifieddamagesinthismodelcouldbeseenasalowerboundtoexpectedclimatechangedamages,butdamagescouldbesignificantlyhigherthanprojected.Table2showstheclimatechangedamagesforthedifferentregionsinpercentageofGDPfor2010,2050and2100intheBAUscenario.Ascanbeseeninthetabledamagesestimatesvaryconsiderablybetweenregionsinthemodel.

Table2ClimatechangedamagesaspercentageofGDPforregionsoftheAD-RICE2012modelfor2010,2050and2100fortheBAUscenario

Region Japan USA EU OHI ME LATAM Russia Asia EuAsia China India Africa

2010 0.1 0.1 0.1 0.1 0.4 0.1 0.1 0.2 0.1 0.1 0.4 0.5

2050 0.8 0.6 0.7 0.7 1.3 0.7 0.5 1.22 0.5 0.7 1.6 1.5

2100 2.3 2.0 1.8 1.9 3.0 2.0 1.3 2.8 1.9 1.9 4.6 4.3

The AD-RICE2012 model includes 2 forms of adaptation namely proactive adaptation, reactiveadaptation. This distinction has been made to enable a more accurate description of the costs andbenefits of different forms of adaptation and hence the total adaptation costs. Reactive adaptationdescribesadaptationmeasuresthatcanbetakeninreactiontoclimatechangeorclimatechangestimuli.This form of adaptation comes at a relatively low cost and is generally undertaken by individuals.Examplesofthisformofadaptationaretheuseofair-conditioningorthechangingofcropplantingtimes.Proactive adaptation on the other hand refers to adaptationmeasures that require investments longbefore the effects of climate change are felt. This form of adaptation usually requires large scaleinvestmentsmadebygovernments.Examplesofthisformofadaptationareresearchanddevelopmentintonewcroptypesortheconstructionofadamforirrigationpurposes.

The net damages of the RICE2010models are separated into adaptation costs and residual damages.Firstlythegrossdamages(damagesbefore/withoutadaptation)aredefinedasfollows:

3,, 1, 2,

jj t j t j tGD T Tαα α= ⋅ + ⋅ .

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where 1, jα and 2, jα are positive damage parameters and 3, jα ranges between 1-4 andT the level of

atmospherictemperatureincreasecomparedto1900.

These are the damages that occur if no adaptation takes place, and are thus higher than the netdamages. These damages can be reduced through the use of adaptation, assuming the followingrelationship:

,,

,1j t

j tj t

GDRD

P=

+,

where ,j tP is the total level of protection (stock and flow) and ,j tRD are the residual damages. This

functional formischosenbecause it limitsthefractionbywhichthegrossdamagescanbereducedtotheintervalof0to1.Whentotalprotectionreachesinfinity,allgrossdamagesarereduced(theresidualdamages are zero) and when no protection is undertaken no gross damages are reduced (residualdamagesequalgrossdamages).Thisfunctionalformalsoensuresdecreasingmarginaldamagereductionofprotection,thatisthemoreprotectionisusedthelesseffectiveadditionalprotectionwillbe.Thisisassumedasmoreeffective,efficientmeasuresofadaptationwillfirstbeappliedwhereaslesseffectivemeasuresafterthat.

1. Twoformsofadaptation (stockandflow)togethercreatetotaladaptation.ThetwoformsofadaptationareaggregatedtogetherusingaConstantElasticityofSubstitution (CES) function.Heretheelasticityofsubstitutioncanbecalibratedtoreflecttheobservedrelationshipbetweenthetwoforms.Thisfunctionisgivenasfollows:

3, /, 1, , 2, ,( ) j AAAj t j j j t j j tP SAD FAD ν ρρργ ν ν= ⋅ + ,

where ,j tSAD is the total amount of adaptation capital stock. ,j tFAD is the amount spent on reactive

adaptationinthatperiod.Furthermore,1

Aσ

ρσ−

= ,whereσ istheelasticityofsubstitution.

Adaptationcapitalstockisbuiltupasfollows:

, 1 , ,(1 )j t k j t j tSAD SAD IADδ+ = − + ,

where kδ isthedepreciationrateand ,j tIAD aretheinvestmentsinstockadaptation( tSAD ).

TheadaptationmoduleofAD-RICE2012iscalibratedbasedonestimatesofadaptationcostsandbenefitsfrom the impact literature. More precisely for each climate impact sector the adaptation costs andbenefits foreachregionwereestimatedbasedonavailable impactstudiesandexpert judgment.Forafulldescriptionofthisprocess,pleaserefertodeBruin(2014).

Climate change is global environmental problem, affecting all regions of the world both now and incenturies to come. Both the causes of climate change (different sources of GHG emissions) and theeffectsofclimatechangeareinnumerable,diverse,andvaryisscopeandscale.Attemptingtoincludeallcausesandeffectsofclimatechangeinasinglemodelisadifficulttask.Especiallyestimatingtheeffects

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ofclimatechangeinthelongrunisacomplexprocess,whichinvolvesmanyuncertainties.IAMsaretoolscreatedtoassesstheeffectsoftheeconomyonclimatechangeandviceversainthelongrun.Duetothemany mechanisms involved and the long time frame, these models need to make (simplifying)assumptions.IAMsarehencehighlyaggregatedtop-downmodels,whichdonotincludeallsectoralandregionalimpactsindetail.Thoughtheseassumptionsandsimplificationsarenecessaryduetobothlackof data (it is hard to predict future effects) and computational limitations, they do form a significantdrawback of IAMs. Given these drawbacks applying amodel such as AD-RICE can still give importantinsightsintothemagnitudeanddevelopmentofboththeeconomyandtheclimate.Giventhatclimatechangeisbothaglobalproblemandwillhavethegreatestaffectsinthelongterm,ananalysisofclimatechange is incompletewithoutaglobal long-termperspective. Thestrengthof IAMssuchasAD-RICE isthattheycanshedsomelightonthelong-termclimateconsequencesofouractionsnow.

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