MODELING THE ECONOMICS OF GREENHOUSE GAS MITIGATION
SUMMARY OF A WORKSHOP
K. John Holmes, Rapporteur
NATIONAL RESEARCH COUNCIL
OF THE NATIONAL ACADEMIES
THE NATIONAL ACADEMIES PRESS
Washington, D.C.
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NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine.
This study was supported by funding from the U.S. Department of Energy under contract DE-AM01-04PI45013/DE-DT0000010/002. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the views of the organizations or agencies that provided support for the project.
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PLANNING COMMITTEE FOR THE WORKSHOP ON ASSESSING ECONOMIC IMPACTS OF GREENHOUSE GAS MITIGATION
JOHN WEYANT,
Stanford University,
Chair
MARILYN BROWN,
Georgia Institute of Technology
WILLIAM NORDHAUS,
Yale University
KAREN PALMER,
Resources for the Future
RICHARD RICHELS,
Electric Power Research Institute
STEVEN SMITH,
Pacific Northwest National Laboratory
Project Staff
K. JOHN HOLMES, Responsible Staff Officer,
Board on Energy and Environmental Systems
JAMES J. ZUCCHETTO, Director,
Board on Energy and Environmental Systems
LaNITA JONES, Administrative Coordinator,
Board on Energy and Environmental Systems
E. JONATHAN YANGER, Senior Program Assistant,
Board on Energy and Environmental Systems
BOARD ON ENERGY AND ENVIRONMENTAL SYSTEMS
ANDREW BROWN, JR., NAE,1
Delphi Technologies, Troy, Michigan, Chair
RAKESH AGRAWAL,
NAE, Purdue University, West Lafayette, Indiana
WILLIAM BANHOLZER,
NAE, Dow Chemical Company, Midland, Michigan
MARILYN BROWN,
Georgia Institute of Technology, Atlanta
MICHAEL CORRADINI,
NAE, University of Wisconsin, Madison
PAUL DeCOTIS,
Long Island Power Authority, Albany, New York
CHRISTINE EHLIG-ECONOMIDES,
NAE, Texas A&M University, College Station
WILLIAM FRIEND,
NAE, Bechtel Group, Inc. (retired), McLean, Virginia
SHERRI GOODMAN,
CNA, Alexandria, Virginia
NARAIN HINGORANI,
NAE,
Independent Consultant,
Los Altos Hills, California
ROBERT J. HUGGETT, Independent Consultant
Seaford, Virginia
DEBBIE NIEMEIER,
University of California, Davis
DANIEL NOCERA, NAS,2
Massachusetts Institute of Technology, Cambridge
MICHAEL OPPENHEIMER,
Princeton University, Princeton, New Jersey
DAN REICHER,
Stanford University, Stanford, California
BERNARD ROBERTSON, NAE,
Daimler-Chrysler (retired), Bloomfield Hills, Michigan
ALISON SILVERSTEIN, Independent Consultant,
Pflugerville, Texas
MARK THIEMENS,
NAS, University of California, San Diego
RICHARD WHITE,
Oppenheimer & Company, New York
Staff
JAMES J. ZUCCHETTO, Director,
Board on Energy and Environmental Systems
DUNCAN BROWN, Senior Program Officer
DANA CAINES, Financial Associate
ALAN CRANE, Senior Program Officer
K. JOHN HOLMES, Senior Program Officer
LaNITA JONES, Administrative Coordinator
MADELINE WOODRUFF, Senior Program Officer
E. JONATHAN YANGER, Senior Project Assistant
Preface
The 2010 National Research Council (NRC) workshop “Modeling the Economics of Greenhouse Gas Mitigation” was initiated by the Department of Energy (DOE) to help address the agency’s need for improved economic modeling tools to use in the development, analysis, and implementation of policies to address greenhouse gas mitigation. As understanding improves of the issues addressed by and the relationships among the climate sciences, economics, and policy-making communities, techniques and modeling tools currently being used will have to be improved or modified. Critical elements in these activities include the understanding and modeling of new technologies as they move from demonstration to deployment.
This is the second NRC workshop organized with a focus on economic modeling issues. The first such workshop, “Assessing Economic Impacts of Greenhouse Gas Mitigation,” was held on October 2-3, 2008, in Washington, D.C., with the goal of gaining a broader view of the variables to be accounted for and techniques used when attempting this type of modeling.1 As a follow-up, the current workshop sought to delve more deeply into some of the key issues discussed in 2008. As with the first workshop, the second was an effort to engage leaders from the policy, economic, and analytical communities in helping to define the frontiers of and provide insight into the opportunities for enhancing the capabilities of existing models to assess the economic impacts of efforts to reduce greenhouse gas emissions.
This summary captures the major topics discussed at the second workshop. It does not include any consensus views of the participants or the planning committee, does not contain any conclusions or recommendations on the part of the National Research Council, and does not offer any advice to the government, nor does it represent a viewpoint of the National Academies or any of its constituent units. No priorities are implied by the order in which ideas are presented.
The workshop itself was divided into four major sessions (see Appendix A), each including a moderator, a number of distinguished speakers, and a panel of discussants who provided comments and additional perspectives on the speakers’ presentations. The workshop was planned by a committee of experts who identified the major topics for discussion and selected speakers and participants well respected in their fields (see Appendix B for short biographical sketches). Papers submitted by the workshop speakers are reprinted essentially as received in Appendix C.
I would like to thank John Weyant, Marilyn Brown, William Nordhaus, Karen Palmer, Rich Richels, and Steven Smith for their extensive work in planning and executing this project. I also extend my gratitude to each presenter and discussant who contributed to this event. Jim Zucchetto and Peter Blair of the Division on Engineering and Physical Sciences provided valuable program direction, for which I am grateful. Jonathan Yanger also deserves special recognition for his program support on this project.
This workshop would not have been possible without the financial support of its sponsor: the U.S. Department of Energy’s Office of Policy and International Affairs. Inja Paik and Bob Marlay of the Department of Energy provided the planning committee with useful input which helped it to develop a workshop that proved both timely and valuable to the various policy, economic, and analytic communities engaged in the many aspects of greenhouse gas mitigation.
This workshop summary has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the NRC’s Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for quality and objectivity. The review comments and draft manuscript remain confidential to protect the integrity of the review process.
Thanks are extended to the following individuals for their review of this workshop summary:
Paul DeCotis, Long Island Power Authority
Robert W. Fri, Resources for the Future
Charles Goodman, Southern Company (retired)
William Nordhaus, Yale University
Karen Palmer, Resources for the Future
Although the reviewers listed above provided many constructive comments and suggestions, they were not asked to endorse the content of the summary, nor did they see the final draft before its release. Responsibility for the final content of this report rests entirely with the author and the institution.
K. John Holmes
Rapporteur