1. Options that eliminate or reduce greenhouse gas emissions.
2. Options that "offset" emissions by removing greenhouse gases from the atmosphere, by blocking incident solar radiation, or by altering the reflection or absorption properties of the earth's surface.
3. Options that help human and ecologic systems adjust or adapt to new climatic conditions and events.
In this report the first and second types of interventions are referred to as "mitigation" since they can take effect prior to the onset of climate change and slow its pace. Mitigation options are discussed in more detail in Chapter 6 and Part Three. The third type of intervention is referred to as "adaptation" since its effects come into play primarily after climate has changed. A fuller discussion of adaptation appears in Chapter 5 and Part Four.
In comparing mitigation and adaptation, one consideration is whether a given action will, in addition to providing adaptation or mitigation benefits, also improve economic efficiency. Even progressive societies find much of their economic activity falling short of demonstrated "best practice." New, more efficient practices are being developed continually, but it takes time for them to diffuse throughout the economy. There are many obstacles to more rapid diffusion of better practice, including lack of information, insufficient supply of components or products, political interests, inappropriate incentives, and simple human inertia. In general, however, every society has many opportunities to improve its overall situation by reducing the gap between current practice and best practice. Many of the actions taken to deal with potential greenhouse warming could also improve economic well-being because they are more efficient than prevailing practice. These options should be distinguished from another class of actions: so-called "free-standing" actions, which satisfy other social or environmental objectives (and may or may not contribute to economic efficiency as such).
Figure 4.1 compares hypothetical mitigation and adaptation actions in response to potential greenhouse warming. If climate change occurs, and no mitigation or adaptation actions are undertaken, a substantial reduction in real income is likely over time. Initially, mitigation is likely to reduce real income more than either doing nothing or taking adaptation measures as climatic changes emerge. Ultimately, however, mitigation actions could result in higher real income than waiting and taking adaptation measures. In this scenario, investing in mitigation reduces consumption now, but produces advantages in the future. Expenditures on mitigation options should thus be seen as investments in the future.
Many combinations of mitigation and adaptation actions are possible. Choosing the best mix of mitigation and adaptation strategies depends in part on the discount rate applied to the investment. The higher the discount rate, the greater the case for postponement of costly actions. Use of discount rates is one way of assigning values to future outcomes.