by Felix Creutzig
Can we rely on renewable energies and electric cars to win the climate race? Surely, such technologies will make great contributions, and, in fact, are absolutely necessary to achieve ambitious climate goals, such as the 2C target. Yet, they might not be sufficient.
In a comprehensive review, published in Annual Review of Environment and Resources, we investigate the role of the demand side to climate change mitigation. The review finds substantiative opportunities in particular in the food sector, and in cities. At least 20% counterfactual reductions in emissions can be achieved by reducing meat consumption, by modal shift and compacter urban form in urban transport, and in the building sector by behavioral change. The overall range is broad and uncertain, and higher contributions of the demand side are feasible.
Demand-side solutions fall into two (overlapping) classes: infrastructures and behavioural change. Infrastructures essentially form endogenous preferences and set the cost structures for consumption choices (think about the convenience of public transport or car driving in Manhattan and Houston). Behavioural change involves opportunities to change entrenched habits, partially also by modifying ‘soft’ infrastructures, e.g. by nudging.
The review also identifies key hurdles to perform assessment of demand-side solutions. Key among them is that conventional cost-benefit analysis is hard to carry out when preferences are not exogenously given. Then costs and benefits not only depend on given environmental outcomes of a specific intervention, but also on how preferences changed by the intervention. A comprehensive model of human behaviour is required (see figure above).
The demand side received only scarce attention in recent assessment reports and the reasons are not necessarily obvious. The technical difficulties certainly discourage quantitative assessments. Yet, given its likely importance, more studies should systematically tackle this challenge, notably learning from the experience in urban studies.
This blog was written for the Cynthia and George Mitchell Foundation, and originally appeared here: http://www.cgmf.org/blog-entry/213/.
This is the first of a two-part series. Part 2 is: “The most important and misleading assumption in the world.“
If we want to maximize our ability to achieve future energy, climate, and economic goals, we must start to use improved economic modeling concepts. There is a very real tradeoff of the rate at which we address climate change and the amount of economic growth we experience during the transition to a low-carbon economy.
If we ignore this tradeoff, as do most of the economic models, then we risk politicians and citizens revolting against the energy transition midway through.
On September 3, 2016, President Obama and Chinese President Xi Jinping each joined the Paris Climate Change Agreement to support U.S. and Chinese efforts to greenhouse gas emissions (GHGs) limits for their respective country. This is an important signal to the world that the presidents of the two largest economies and GHG emitters are cooperating on a truly global environmental matter, and it provides two leaps toward obtaining enough global commitments to set the Paris Agreement in motion.
The economic outcomes from models used to inform policymakers like Presidents Obama and Xi, however, are so fundamentally flawed that they are delusional.
The projections for climate and economy interactions during a transition to low-carbon economy are performed using Integrated Assessment Models (IAMs) that link earth systems models to human activities via economic models. Several of these IAMs inform the Intergovernmental Panel on Climate Change (IPCC), and the IPCC reports in turn inform policy makers.
The earth systems part of the IAMs project changes to climate from increased concentration of greenhouse gases in the atmosphere, land use changes, and other biophysical factors. The economic part of the IAMs characterizes human responses to the climate and the changes in energy technologies that are needed to limit global GHG emissions.
For example, the latest IPCC report, the Fifth Assessment Report (AR5), projects a range of baseline (e.g., no GHG mitigation) scenarios in which the world economy is between 300 and and 800 percent larger in the year 2100 as compared to 2010.
The AR5 report goes on to indicate the modeled decline in economic growth under various levels of GHG mitigation. That is to say, the economic modeling assumes there are additional investments, beyond business as usual, needed to reduce GHG emissions. Because these investments are in addition to those made in the baseline scenario, they cost more money and the economy will grow less.
The report indicates that if countries invest enough to reduce GHG emissions over time to stay below a policy target of a 2oC temperature increase by 2100 (e.g., CO2, eq. concentrations < 450 ppm), then the decline in the size of the economy is typically less than 5 percent, or possibly up to 11 percent. This economic result coincides with a GHG emissions trajectory that essentially reaches zero net GHG emissions worldwide by 2100.
Think about that result: Zero net emissions by 2100 and, instead of the economy being 300 to 800 percent larger without mitigation, it is “only” 280 to 750 percent larger with full mitigation. Apparently we’ll be much richer in the future no matter if we mitigate GHG emissions or not, and there is no reported possibility of a smaller economy.
This type of result is delusional, and doesn’t pass the smell test.
Humans have not lived with zero net annual GHG emissions since before the start of agriculture. The results from the models also indicate the economy always grows no matter the level of climate mitigation or economic damages from increased temperatures.
The reason that models appear to output that economic growth always occurs is because they actually input that growth always occurs. Economic growth is an assumption put into the models.
This assumption in macroeconomic models is the so-called elephant in the room that, unfortunately, almost no one talks about or seeks to improve.
The models do answer one (not very useful) question: “If the economy grows this much, what types of energy investments can I make?” Instead, the models should answer a much more relevant question: “If I make these energy investments, what happens to the economy?”
The energy economic models, including those used by United States government agencies, effectively assume the economy always returns to some “trend” of the past several decades—the trend of growth, the trend of employment, the trend of technological innovation. They extrapolate the past economy into a future low-carbon economy in a way that is guesswork at best, and a belief system at worst.
We have experience in witnessing disasters of extrapolation.
The space shuttle Challenger exploded because the launch was pressured to occur during cold temperatures that were outside of the tested range of the sealing O-rings of the solid rocket boosters. The conditions for launch were outside of the test statistics for the O-rings.
The firm Long Term Capital Management (LTCM), run by Nobel Prize economists, declared bankruptcy due to economic conditions that were thought to be practically impossible to occur. The conditions of the economy ventured outside of the test statistics of the LTCM models.
The Great Recession surprised former Federal Reserve chairman Alan Greenspan, known as “the Wizard.” He later testified to Congress that there was a “flaw in the model that I perceived is the critical functioning structure that defines how the world works, so to speak.”
Greenspan extrapolated nearly thirty years of economic growth and debt accumulation as being indefinitely possible. The conditions of the economy ventured outside of the statistics with which Greenspan was familiar.
The state of our world and economy today continues to reside outside of historical statistical realm. Quite simply, we need macroeconomic approaches that can think beyond historical data and statistics.
How do we fix the flaw in macroeconomic models used for assessment of climate change? Part two of this two-part series will explain that there is research pointing to methods for improved modeling of what is termed “total factor productivity,” and, in effect, economic growth as a function of the energy system many seek to transform.
by Liz Kalaugher
The IPCC reports are a massive undertaking but have they had their day? Myles Allen of the University of Oxford, UK, believes it’s now time to move away from international assessments and focus on regional impacts.
The statement “it is extremely likely that human influence has been the dominant cause of the observed warming since the mid-20th century” is becoming analogous to saying that “the Earth moves round the Sun” in the 1700s, Allen said at the EGU meeting in Vienna. “It’s still important,” he added, “but no longer very interesting”.
Allen reckons the focus of climate science has shifted to quantifying the impacts of local changes and extreme weather events, and is no longer appropriate for international assessment.
Thomas Stocker of the University of Bern, who was working group 1 co-chair for the IPCC’s fifth assessment report, disagrees. The IPCC process “continues to provide an essential common ground for negotiations”, he said at an EGU press conference. Many of working group 1’s headline statements made it directly into the documents for negotiation, for example.
That said, Stocker believes that scientists have “experienced the limits of the task, what they can bear”. The process could become “unmanageable if significant assistance is not offered to scientists”.
Jochem Marotzke of the Max Planck Institute of Meteorology, meanwhile, took a middle view. He is “convinced the process is effective…and it delivers comprehensive and reliable information” but doesn’t think that it’s efficient in terms of either time or cost. “You ask yourself, why are we doing this comprehensive assessment when we know much of it won’t make it into the summary for policymakers (SPM),” he said. Lots of the detail and “whole large blocks of topics” don’t make it into the summary. “Climate scientists have to support this assessment but we need to find a way to make it more efficient,” he concluded.
Allen agreed. “If a topic doesn’t need to be in the SPM, perhaps it should be assessed regionally,” he said. “We need a balance.”
- Allen has also responded to (non-climate) feedback by animating his 3-D plot of observed, natural and human-induced climate change so that it’s easier to visualize.
Today saw the launch of the IPCC’s Special Report on Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation, or SREX for short. You can hear IPCC chair Raj Pachauri, co-chairs of working group I Thomas Stocker and Qin Dahe, and co-chairs of working group II Chris Field and Vicente Barros present the report at the press conference below, as well as listening in to media questions.
If you prefer your information in text form rather than audio, the summary for policymakers and full report are available at http://ipcc-wg2.gov/SREX/
According to IPCC chair Raj Pachauri in a press release, “this summary for policymakers provides insights into how disaster risk management and adaptation may assist vulnerable communities to better cope with a changing climate in a world of inequalities”.
Qin Dahe said: “There is high confidence that both maximum and minimum daily temperatures have increased on a global scale due to the increase of greenhouse gases. Changes in other extremes, such as more intense and longer droughts are observed in some
regions, but the assessment assigns medium confidence due to a lack of direct observations and a lack of agreement in the available scientific studies.”
Thomas Stocker explained that for the high emissions scenario, it is likely that
the frequency of hot days will increase by a factor of 10 in most regions of the world. “Likewise, heavy precipitation will occur more often, and the wind speed of tropical cyclones will increase while their number will likely remain constant or decrease”.
Vicente Barros believes that there are many options for decreasing risk. “Some of these have been implemented, but many have not,” he said. “The best options can provide benefits across a wide range of possible levels of climate change.”
Chris Field, meanwhile, hopes that “this report can be a scientific foundation for sound decisions on infrastructure, urban development, public health, and insurance, as well as for planning–from community organizations to international disaster risk management.”
Speaking elsewhere, Bob Ward of the Grantham Research Institute on Climate Change and the Environment at London School of Economics and Political Science said: “This expert review of the latest available scientific evidence clearly shows that climate change is already having an impact in many parts of the world on the frequency, severity and location of extreme weather events, such as heatwaves, droughts and flash floods. This is remarkable because extreme events are rare and it is difficult to detect statistically significant trends in such small sets of data.”
Ward added that these trends have been identified over the last few decades when the rise in global average temperature has been just a few tenths of a centigrade degree. “The report shows that if we do not stop the current steep rise in atmospheric levels of greenhouse gases, we will see much more warming and dramatic changes in extreme weather which are likely to overwhelm any attempts human populations might make to adapt to their impacts. Governments must focus clearly on reaching a strong international agreement to strengthen their efforts to reduce emissions and to prepare their populations for those impacts of climate change that cannot now be avoided.”
By Liz Kalaugher
The Danish passion for design came to the fore at the
Climate Change Congress opening session this morning. Not only was there an
unusually artistic backdrop at the front of the hall – a massive cut-out
version of the conference iceberg logo – but around 2500 delegates, including
Danish royalty, were also entertained with some virtuoso recorder playing.
Once the conference kicked off for real, however, the
outlook was more bleak. A wide range of climate and other scientists have come
together to discuss their discoveries since the IPCC report of 2007. Because of
the way that report was produced, that means any results from the last 4-5
years. In a nutshell, the news is not good.
Carbon emissions are now at the upper bound of those
projected by the IPCC, sea level rise could well top one metre by the end of
the century, and it appears that tropical forest carbon sinks are likely to
decline as the planet warms, to name just a few.
“The good news is in the social sciences and the
human sciences,” said Katherine Richardson of the University of Copenhagen
and chair of the conference scientific steering committee. “In those
fields you will find we have a lot of tools in our toolbox, things we can do
For once, the credit crunch is arguably good news as it’s
likely to see a slowdown in world carbon emissions. Although, according to
Terry Barker of the University of Cambridge, it could also lead to a collapse
of the European emissions trading scheme as declining demand for electricity
leads to a plummeting price for emissions credits.
“Politicians have refocused on jobs because of the
economic crisis,” said John Ashton of the UK Foreign and Commonwealth
Office. “If we want a successful response to climate change we have to
reframe it in terms of jobs. We need to build the prospect of a low carbon
The plan is for the output from the conference to feed
into the climate negotiations for the follow-on treaty to the Kyoto Protocol to
be held in the same venue in December. “We are looking for things to
happen from this conference, not just more talk,” said Ian Chubb of
Australian National University
With that in mind, organizers will produce a 30 page long
synthesis report by June 1st while next year will see the release of a book.
What’s more, at the conference closing ceremony on Thursday, Danish prime
minister Anders Fogh Rasmussen will receive a summary of a handful of key
results presented at the event. He’ll then discuss these with a panel of
leading researchers, including Dan Kammen of the University of California,
Berkeley, and Nicholas Stern of the London School of Economics and Political
Science. Watch this space for more.
Since 2000, emissions from fossil fuel
combustion have grown three times faster than in the mid-late 1990s.
“Emissions are now outside the whole envelope of possibilities considered
in the IPCC’s fourth assessment report,” said Chris Field of Stanford
University and the Carnegie Institution for Science at a press briefing at the
AAAS Annual Meeting. “The emissions trajectory used was too optimistic –
we didn’t think broadly enough.”
To make matters worse, nobody’s certain
how effective the carbon sink currently provided by the oceans and land will be
in the future, or even whether they will become a source. For example, in
greenhouse studies, additional carbon dioxide increased plant growth by around
50% but Field says that, while this was considered an immature topic in the
fourth assessment report, we now know that nutrient and other restrictions will
stop that from happening in the field.
“Every new piece of information I
see makes the scary side look scarier,” added Field. “The situation
is more complicated than we thought in AR4 – we have higher emissions and a
less friendly natural system. We will have to avoid more carbon emissions than
we thought – either start earlier or make more aggressive cuts.”
A number of delegates were concerned
that the lengthy IPCC report process could delay policymakers from taking
action. “The challenge is that we can either be fast or we can be
good,” said Field, who is one of the leaders of the fifth IPCC assessment
report, due for publication in 2013/14. With an eye to more
“policy-relevant timescales”, the IPCC will release between two and
five special reports that take 12-18 months to produce before this. The first
will be on renewable energy; scientists will decide at a meeting in Turkey next
month whether to go ahead with a special report on climate extremes and
adaptation to those extremes.
In line with the general mood at the
conference, Field was optimistic about the new US administration and climate
change mitigation. “There is lots of talk that we may see the US re-emerge
as a leader on this important issue,” he said. “I hope it does.”
Moving from fourth to fifth
So how will the fifth assessment compare
science-wise? During AR4, eighteen
research groups contributed mainly physical climate models with century
timescales, detailed Ronald Stouffer of the Geophysical Fluid Dynamics
Laboratory in Princeton, US. In contrast AR5 will see 25 groups contribute a
mix of earth system models and global climate models with decadal to century
timescales. Earth system models “close the carbon cycle” by looking
at the effect of biological changes on climate; typically they contain details
of atmospheric chemistry, ocean ecology and biogeochemistry, plant ecology and
According to Stouffer, some of the
modelling challenges that remained at the end of the fourth assessment report
include clouds and aerosols, oceanic heat uptake, regional climate information,
land ice modelling, and the carbon cycle. As well as tackling some of these
challenges, the fifth assessment will also include emerging frontiers of
research such as decadal prediction, and the feedback between climate and air