PROGRESS IN ESTIMATING THE MARGINAL COSTS OF GREENHOUSE GAS EMISSIONS

The unjust distributional consequences of climate change, and its potentially negative aggregate effect on economic growth and welfare are two reasons to be concerned about climate change. Our knowledge of the impact of climate change is incomplete. Monetary valuation is difficult and controversial. The effect of other developments on the impacts of climate change is largely speculative. Nonetheless, it can be shown that poorer countries and people are more vulnerable than are richer countries and people. A modest global warming is likely to have a net negative effect on poor economics in hot climates, but may have a positive effect on rich economies in temperate climates. If one counts dollars, the world aggregate impact may be positive. If one counts people, the world aggregate effect is probably negative. For more substantial warming, negative effects become more negative, and positive effects turn negative. The marginal costs of carbon dioxide emissions are uncertain and sensitive to assumptions that partially reflect ethical and methodological positions, but are unlikely to exceed $50 per tonne of carbon. The marginal costs of methane emission are likely to be less than$250/tCH4; the marginal costs of nitrous oxide emissions are probably lower than $7000/tN2O. Global warming potentials, the official manner to trade-off the various greenhouse gases, do not reflect, conceptually or numerically, the real tradeoffs in either a cost-benefit or a cost-effectiveness framework.Impacts of climate change, economic valuation, equity, marginal costs

Synthesis and Assessment Product

This and a companion report constitute one of twenty-one Synthesis and Assessment Products called for in the Strategic Plan for the U.S. Climate Change Science Program. These studies are structured to provide high-level, integrated research results on important science issues with a particular focus on questions raised by decision-makers on dimensions of climate change directly relevant to the U.S. One element of the CCSP's strategic vision is to provide decision support tools for differentiating and evaluating response strategies. Scenario-based analysis is one such tool. The scenarios in this report explore the implications of alternative stabilization levels of anthropogenic greenhouse gases (GHGs) in the atmosphere, and they explicitly consider the economic and technological foundations of such response options. Such scenarios are a valuable complement to other scientific research contained in the twenty-one CCSP Synthesis and Assessment Products. The companion to the research reported here, Global-Change Scenarios: Their Development and Use, explores the broader strategic frame for developing and utilizing scenarios in support of climate decision making