Modelling Economic Impacts of Alternative International Climate Policy Architectures.A Quantitative and Comparative Assessment of Architectures for Agreement

This paper provides a quantitative comparison of the main architectures for an agreement on climate policy. Possible successors to the Kyoto protocol are assessed according to four criteria: economic efficiency; environmental effectiveness; distributional implications; and their political acceptability which is measured in terms of feasibility and enforceability. The ultimate aim is to derive useful information for designing a future agreement on climate change control.climate policy, integrated modelling, international agreements

Delayed Participation of Developing Countries to Climate Agreements: Should Action in the EU and US be Postponed?

This paper analyses the cost implications for climate policy in developed countries if developing countries are unwilling to adopt measures to reduce their own GHG emissions. First, we assume that a 450 CO2 (550 CO2e) ppmv stabilisation target is to be achieved and that Non Annex1 (NA1) countries decide to delay their GHG emission reductions by 30 years. What would be the cost difference between this scenario and a case in which both developed and developing countries start reducing their emissions at the same time? Then, we look at a scenario in which the timing of developing countries’ participation is uncertain and again we compute the costs of climate policy in developed and developing countries. We find that delayed participation of NA1 countries has a negative impact on climate policy costs. Economic inefficiencies can be as large as 10-25 TlnUSD. However, this additional cost wanes when developing countries are allowed to trade emission reductions from their baseline emission paths during the 30-year delay period. Thus, irrespective of whether NA1 countries are immediately assigned an emission reduction target or not, they should nonetheless be included in a global carbon market. Technology deployment is also affected by the timing of developing countries’ mitigation measures. Delayed NA1-country participation in a climate agreement would scale down the deployment of coal with CCS throughout the century. On the other hand, innovation in the form of energy R&D investments would be positively affected, since it would become crucial in developed countries. Finally, uncertainty about the timing of NA1-country participation does not modify the optimal abatement strategy for developed countries and does not alter policy costs as long as a global carbon market is in place.Delayed Action, Climate Policy, Stabilisation Costs, Uncertain Participation

Delayed Action and Uncertain Targets. How Much Will Climate Policy Cost?

Despite the growing concern about actual on-going climate change, there is little consensus about the scale and timing of actions needed to stabilise the concentrations of greenhouse gases. Many countries are unwilling to implement effective mitigation strategies, at least in the short-term, and no agreement on an ambitious global stabilisation target has yet been reached. It is thus likely that some, if not all countries, will delay the adoption of effective climate policies. This delay will affect the cost of future policy measures that will be required to abate an even larger amount of emissions. What additional economic cost of mitigation measures will this delay imply? At the same time, the uncertainty surrounding the global stabilisation target to be achieved crucially affects short-term investment and policy decisions. What will this uncertainty cost? Is there a hedging strategy that decision makers can adopt to cope with delayed action and uncertain targets? This paper addresses these questions by quantifying the economic implications of delayed mitigation action, and by computing the optimal abatement strategy in the presence of uncertainty about a global stabilisation target (which will be agreed upon in future climate negotiations). Results point to short-term inaction as the key determinant for the economic costs of ambitious climate policies. They also indicate that there is an effective hedging strategy that could minimise the cost of climate policy under uncertainty, and that a short-term moderate climate policy would be a good strategy to reduce the costs of delayed action and to cope with uncertainty about the outcome of future climate negotiations. By contrast, an insufficient short-term effort significantly increases the costs of compliance in the long-term.Uncertainty, Climate Policy, Stabilisation Costs, Delayed Action

Delayed Action and Uncertain Targets. How Much Will Climate Policy Cost?

Despite the growing concern about actual on-going climate change, there is little consensus about the scale and timing of actions needed to stabilise the concentrations of greenhouse gases. Many countries are unwilling to implement effective mitigation strategies, at least in the short-term, and no agreement on an ambitious global stabilisation target has yet been reached. It is thus likely that some, if not all countries, will delay the adoption of effective climate policies. This delay will affect the cost of future policy measures that will be required to abate an even larger amount of emissions. What additional economic cost of mitigation measures will this delay imply? At the same time, the uncertainty surrounding the global stabilisation target to be achieved crucially affects short-term investment and policy decisions. What will this uncertainty cost? Is there a hedging strategy that decision makers can adopt to cope with delayed action and uncertain targets? This paper addresses these questions by quantifying the economic implications of delayed mitigation action, and by computing the optimal abatement strategy in the presence of uncertainty about a global stabilisation target (which will be agreed upon in future climate negotiations). Results point to short-term inaction as the key determinant for the economic costs of ambitious climate policies. They also indicate that there is an effective hedging strategy that could minimise the cost of climate policy under uncertainty, and that a short-term moderate climate policy would be a good strategy to reduce the costs of delayed action and to cope with uncertainty about the outcome of future climate negotiations. By contrast, an insufficient short-term effort significantly increases the costs of compliance in the long-term.uncertainty, climate policy, stabilisation costs, delayed action

Modelling Economic Impacts of Alternative International Climate Policy Architectures. A Quantitative and Comparative Assessment of Architectures for Agreement

This paper provides a quantitative comparison of the main architectures for an agreement on climate policy. Possible successors to the Kyoto protocol are assessed according to four criteria: economic efficiency; environmental effectiveness; distributional implications; and their political acceptability which is measured in terms of feasibility and enforceability. The ultimate aim is to derive useful information for designing a future agreement on climate change control.Climate Policy, Integrated Modelling, International Agreements

The 2008 WITCH Model: New Model Features and Baseline

WITCH is an energy-economy-climate model developed by the climate change group at FEEM. The model has been extensively used in the past 3 years for the economic analysis of climate change policies. WITCH is a hybrid top-down economic model with a representation of the energy sector of medium complexity. Two distinguishing features of the WITCH model are the representation of endogenous technological change and the game–theoretic set-up. Technological change is driven by innovation and diffusion processes, both of which feature international spillovers. World countries are grouped in 12 regions which interact with each other in a setting of strategic interdependence. This paper describes the updating of the base year data to 2005 and some new features: the inclusion of non-CO2 greenhouse gases and abatement options, the new specification of low carbon technologies and the inclusion of reducing emissions from deforestation and degradation.Climate Policy, Hybrid Modelling, Integrated Assessment, Technological Change

The Role of R&D and Technology Diffusion in Climate Change Mitigation: New Perspectives Using the Witch Model

This paper uses the WITCH model, a computable general equilibrium model with endogenous technological change, to explore the impact of various climate policies on energy technology choices and the costs of stabilising greenhouse gas concentrations. Current and future expected carbon prices appear to have powerful effects on R&D spending and clean technology diffusion. Their impact on stabilisation costs depends on the nature of R&D: R&D targeted at incremental energy efficiency improvements has only limited effects, but R&D focused on the emergence of major new low-carbon technologies could lower costs drastically if successful – especially in the non-electricity sector, where such low-carbon options are scarce today. With emissions coming from multiple sources, keeping a wide range of options available matters for stabilisation costs more than improving specific technologies. Due to international knowledge spillovers, stabilisation costs could be further reduced through a complementary, global R&D policy. However, a strong price signal is always required.Climate policy; Energy R&D; Fund; Stabilisation costs

Optimal energy investment and R&D strategies to stabilize atmospheric greenhouse gas concentrations

Our results emphasize the drastic change in the energy mix that will be necessary to control climate change, the huge investments in existing and new technologies implied, and the crucial role of breakthrough technological innovation

Prevalence and determinants of diabetes mellitus in a representative sample of Italian adults

Background: Diabetes mellitus is a dramatic epidemic worldwide. This study providea an updated estimate of itsprevalence and determinants among Italian adults. Methods: Data were derived from a face-to-face survey conducted in 2013 on 2901 individuals (1391 men, 1510 women) aged ≥18 years, representative of the general adult Italian population. Odds ratios (OR) for diabetes versus non diabetes in relation to selected risk factors were derived using multiple logistic regression models. Results: Overall, 135 out of 2901 adults (4.7%) reported a diagnosis of diabetes, with similar prevalence in men (4.8%) and in women (4.5%). Diabetes increased with age (0.6% at age 18-44, 5.1% at age 45-64, and 11.3% at age ≥65 years; p-trend <0.001) and decreased with increasing level of education (12.8% for low, 7.8% for middle, and 1.4% for high education; p-trend <0.001). Prevalence was higher among obese subjects (10.8%) compared to normal weight subjects (3.1%; OR=2.46; p-trend=0.001), among individuals reporting a physical activity <30 minutes of walk/day (5.6%) compared to those reporting >60 minutes of walk/day (3.8%; OR=1.43), and among ex-smokers (11.6%) compared to never smokers (4.2%; OR=2.51); moreover, it was lower among moderate drinkers (3.1%) than among abstainers (6.1%; OR=0.57; p-trend=0.016). Prevalence of diabetes was 16.1% in individuals with a diagnosis of hypertension (OR=4.66), 15.2% in those with high cholesterol (OR=3.84), and 21.6% among aspirin users (OR=4.46). Conclusion: Although diabetes prevalence in Italy is still comparatively low, effective clinical and preventive intervention strategies – focused on major risk behaviors – should be implemented to control the diffusion of this condition