Expectations of linear functions with respect to truncazted multinormal distributions, with applications for uncertainty analysis in environmental modelling

Uncertainty can hamper the stringency of commitments under cap and trade schemes. We assess how well intensity targets, where countries' permit allocations are indexed to future realised GDP, can cope with uncertainties in a post-Kyoto international greenhouse emissions trading scheme. We present some empirical foundations for intensity targets and derive a simple rule for the optimal degree of indexation to GDP. Using an 18-region simulation model of a 2020 global cap-and-trade treaty under multiple uncertainties and endogenous commitments, we estimate that optimal intensity targets could achieve global abatement as much as 20 per cent higher than under absolute targets, and even greater increases in welfare measures. The optimal degree of indexation to GDP would vary greatly between countries, including super-indexation in some advanced countries, and partial indexation for most developing countries. Standard intensity targets (with one-toone indexation) would also improve the overall outcome, but to a lesser degree and not in all cases. Although target indexation is no magic wand for a future global climate treaty, gains from reduced cost uncertainty might justify increased complexity, framing issues and other potential downsides of intensity targets.linear functions, truncazted multinormal distributions, uncertainty analysis, environmental modelling

The Rise, Fall and Sustainability of Capital-resource Economies

In debates about green accounting it is sometimes argued that a positive value of aggregate investments indicates that an economy is developing sustainably. Asheim (1994) and Pezzey (1994) have shown that this is wrong, using a version of the well-known Dasgupta–Heal economy (with one capital and one non-renewable resource stock) as a counterexample. Asheim’s proof referred to the unproved assumptions that in such an economy a higher rate of time preference induces higher initial consumption and vice versa, and that ‘‘optimal’’ consumption is initially rising and then falling. Here we show that these assumptions do hold true under certain circumstances, thereby also proving some of Dasgupta and Heal’s other conjectures about sustainability. I

Expectations of linear functions with respect to truncated multinormal distributions, with applications for uncertainty analysis in environmental modelling

This paper discusses results concerning multivariate normal distributions that are subject to truncation by a hyperplane and how such results can be applied to uncertainty analysis in the environmental sciences. We present a suite of results concerning truncated multivariate normal distributions, some of which already appear in the mathematical literature. The focus here is to make these types of results more accesible to the environmental science community and to this end we include a conceptually simple alternative derivation of an important result. We illustrate how the theory of truncated multivariate normal distributions can be employed in the environmental sciences by means of an example from the economics of climate change control

Towards a more inclusive and precautionary indicator of global sustainability

We construct a hybrid, economic indicator of the sustainability of global well-being, which is more inclusive than existing indicators and incorporates an environmentally pessimistic, physical constraint on global warming. Our methodology extends the World Bank's Adjusted Net Saving (ANS) indicator to include the cost of population growth, the benefit of technical progress, and a much higher, precautionary cost of current CO2 emissions. Future warming damage is so highly unknowable that valuing emissions directly is rather arbitrary, so we use a novel, inductive approach: we modify damage and climate parameters in the deterministic DICE climate-economy model so it becomes economically optimal to control emissions in a way likely to limit warming to an agreed target, here 2 degrees Celsius. If future emissions are optimally controlled, our ANS then suggests that current global well-being is sustainable. But if emissions remain uncontrolled, our base-case ANS is negative now and our corresponding, modified DICE model has an unsustained development path, with well-being peaking in 2065. Current ANS on an uncontrolled path may thus be a useful heuristic indicator of future unsustainability. Our inductive method might allow ANS to include other very hard-to-value, environmental threats to global sustainability, like biodiversity loss and nitrogen pollution

Sustainable Land Use: Methodology and Application

The chapters in this volume are edited versions of papers presented at the NATO Ad- vanced Research Workshop on Environmental Change Adaptation and Security held in Budapest, Hungary, from October 16 - 18, 1997. As is evident in this volume, the papers ranged from descriptions of environmental and health issues in Russia and Eastern Europe to models of sustainable land use. This diversity of perspectives on environ- ment and security is indicative of both the breadth of this new area of research as well as the varied background of the researchers involved. The discussions at the NATO workshop were remarkably animated and exciting, not surprising given the interest in the topic. I think this vitality is reflected in the papers in this volume as well. The main purpose of the NATO ARW is to foster research links among researchers from NATO countries and Central and Eastern European States, Russia, and the Newly Independent States. In editing this volume, a decision was made to keep to the spirit of this purpose and-if at all possible-include all papers prepared for the workshop. This required extensive editing and rewriting of some of the papers (and consequent delays in production). A determination was made early in the process by the workshop steering committee that the value of publishing the entire collection of articles out- weighed the advantages of accepting only a limited number

Introduction: exploring and explaining the Asia-Pacific Partnership on Clean Development and Climate

This introduction lays the groundwork for this Special Issue by providing an overview of the Asia-Pacific Partnership on Clean Development and Climate (APP), and by introducing three main analytical themes. The first theme concerns the emergence and continuation of the APP. The contributions show that the emergence of the APP can be attributed to international factors, including the United States' rejection of the Kyoto Protocol, and its search for an alternative arena for global climate governance, and other countries' wish to maintain good relations with the US; as well as domestic factors, such as the presence of bureaucratic actors in favour of the Partnership, alignment with domestic priorities, and the potential for reaping economic benefits through participation. The second theme examines the nature of the Partnership, concluding that it falls on the very soft side of the hard-soft law continuum and that while being branded as a public-private partnership, governments remain in charge. Under the third theme, the influence which the APP exerts on the post-2012 United Nations (UN) climate change negotiations is scrutinised. The contributions show that at the very least, the APP is exerting some cognitive influence on the UN discussions through its promotion of a sectoral approach. The introduction concludes with outlining areas for future research. © Springer Science+Business Media B.V. 2009