Lecture 3 Climate Impacts and Responses

Gang He

September 18, 2023

A five points “climate haiku”

1. It’s warming
2. It’s us
3. We’re sure
4. It’s bad
5. We can fix it

Adverse impacts of climate change

The impacts are global

Vulnerable population suffers more

Conventional focues

• Ice melting
• Sea level rising
• Extreme weathers
  • Floods
  • Droughts

Damages to include

• agriculture
• mortality
• energy
• low-risk labor
• high-risk labor
• coastal damages
• property crime
• violent crime

What other damages to include?

Social economic impacts

Climate damage function

\(Economic\ Damage=f(\Delta temperature)\)

• It could be negative or positive
• Integrated Assessment Models/Economic models
  • DICE/RICE
  • FUND
  • PAGE

Climate change and conflicts

Climate change affects energy system

Climate impact to renewable supply-demand match

IPAT

\(I(mpact) = P(opulation) \times A(ffluence) \times T(echnology)\)

\(I(mpact) = \frac{P(opulation) \times A(ffluence)}{T(echnology)}\)

• Technology: renewable energy, energy efficiency, innovations

Kaya identify

\(F=P \times \frac{G}{P} \times \frac{E}{G} \times \frac{F}{E}\)

Where:

• F: global CO2 emissions from human sources
• P: global population
• G: world GDP
• E: global energy consumption

And:

• G/P: GDP per capita
• E/G: energy intensity of the GDP
• F/E: emission intensity of energy

Climate wedges

The Mckinsey cost curve

Social cost of carbon

• Marginal cost of carbon
  
• Cost included:
  
  • Net agricultural productivity
    
  • Human health
    
  • Property damage
    
  • Energy system costs
    
• Cost not included:
  
  • Unknown impact: physical, ecological, economic
    
  • Unknown cost: information
    

EPA social cost of carbon

2010 assessment

2015 assessment

NYDEC ‘Value of Carbon’ Guidance

• Carbon dioxide: $125 per ton
  
• Methane: $2,782 per ton
  
• Nitrous oxide: $44,727 per ton

SCC updates

What works what’s not

• Carbon tax vs. subsides
  
• Regulations vs markets
  
• Considering
  
  • Societal acceptance
    
  • Political feasibility

Best practices

• Energy efficiency
  
• Low carbon eco-city
  
• Renewable integration
  
• Sectoral experiences
  
• Policy/technology tools

Policy instruments

NYS climate impacts assessment

• Up-to-date projections of future climate conditions in New York State
• Sector-based literature reviews
• In-depth economic impact assessments
• A peer-reviewed technical report that conveys scientific findings
• Summaries and syntheses for a wider audience
• Adaptation strategies and case studies
• Links and references to primary sources for full transparency

An ongoing effort, anything missing?

Fuel for thoughts: grand challenges, huge progress, and grand opportunities

References

Armitage, Sarah C., Noël Bakhtian, and Adam B. Jaffe. 2023. “Innovation Market Failures and the Design of New Climate Policy Instruments.” Working Paper. Working Paper Series. National Bureau of Economic Research. https://doi.org/10.3386/w31622.

Carleton, Tamma A, and Solomon M Hsiang. 2016. “Social and Economic Impacts of Climate.” Science 353 (6304): aad9837. https://doi.org/10.1126/science.aad9837.

Ehrlich, Paul R., and John P. Holdren. 1971. “Impact of Population Growth: Complacency Concerning This Component of Man’s Predicament Is Unjustified and Counterproductive.” Science 171 (3977): 1212–17. https://doi.org/10.1126/science.171.3977.1212.

Hsiang, Solomon M., Marshall Burke, and Edward Miguel. 2013. “Quantifying the Influence of Climate on Human Conflict.” Science, August. https://doi.org/10.1126/science.1235367.

Kaya, Yoichi, and Keiichi Yokobori, eds. 1997. Environment, Energy, and Economy: Strategies for Sustainable. Tokyo: United Nations Univ. https://archive.unu.edu/unupress/unupbooks/uu17ee/uu17ee00.htm.

Liu, Laibao, Gang He, Mengxi Wu, Gang Liu, Haoran Zhang, Ying Chen, Jiashu Shen, and Shuangcheng Li. 2023. “Climate Change Impacts on Planned Supply–Demand Match in Global Wind and Solar Energy Systems.” Nature Energy 8 (8): 870–80. https://doi.org/10.1038/s41560-023-01304-w.

Neumann, James E., Jacqueline Willwerth, Jeremy Martinich, James McFarland, Marcus C. Sarofim, and Gary Yohe. 2020. “Climate Damage Functions for Estimating the Economic Impacts of Climate Change in the United States.” Review of Environmental Economics and Policy 14 (1): 25–43. https://doi.org/10.1093/reep/rez021.

Pacala, Stephen, and Robert Socolow. 2004. “Stabilization Wedges: Solving the Climate Problem for the Next 50 Years with Current Technologies.” Science 305 (5686): 968–72. https://doi.org/10.1126/science.1100103.

Rennert, Kevin, Frank Errickson, Brian C Prest, Lisa Rennels, Richard G Newell, William Pizer, Cora Kingdon, et al. 2022. “Comprehensive Evidence Implies a Higher Social Cost of CO2.” Nature, 1–3. https://doi.org/10.1038/s41586-022-05224-9.

Valuing Climate Changes: Updating Estimation of the Social Cost of Carbon Dioxide. 2017. Washington, D.C.: National Academies Press. https://doi.org/10.17226/24651.

Yalew, Seleshi G, Michelle TH van Vliet, David EHJ Gernaat, Fulco Ludwig, Ariel Miara, Chan Park, Edward Byers, et al. 2020. “Impacts of Climate Change on Energy Systems in Global and Regional Scenarios.” Nature Energy 5 (10): 794–802. https://doi.org/10.1038/s41560-020-0664-z.