Assessing Economic Impacts of Greenhouse Gas Mitigation Summary of a Workshop (2009) / Chapter Skim
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4 Economic Considerations
4 Economic Considerations
Pages 15-19
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From page 15... ...
and world economies, approaches to estimating benefits and costs of mitigation, and the intertemporal and distributional equity issues associated with climate change and mitigation. Panelists included William Nordhaus, Yale University; John Weyant, Stanford University; Joel Smith, Stratus Consulting, Inc.; Richard Bradley, International Energy Agency; Dimitri Zenghelis, London School of Economics; and William Cline, Peterson Institute for International Economics.
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From page 16... ...
. Martin Weitzman at Harvard University has written extensively on the importance of this approach, and Bill Nordhaus borrowed a quote from Weitzman to summarize the point, "The catastrophic insurance aspect of a fat tail unlimited exposure situation could dominate basically everything: the discounting, the risk, and the consumption smoothing" (Weitzman, 2009)
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From page 17... ...
There is no correct value judgment, and there will be different views on this. Nordhaus outlined four major catastrophic risks that have emerged over the years in the literature: the reverse of the North Atlantic deep water circulation, melting of large ice sheets, abrupt climate change, and ocean carbonization.
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From page 18... ...
Another important consideration, he said, is that no matter what becomes of power plant sites, energy investors do not easily relinquish the sites because they have already passed local ordinances, shortening the investment period for new construction. The reality, however, is that as fossil fuel plants close, the sites will not automatically be turned over to plants for generating power from renewable resources, due both to resource location and the anecdotal evidence that new technologies move into new demand areas as opposed to replacing existing demand.
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From page 19... ...
Bill Cline stated that the prospective future damage from global warming warrants aggressive abatement action, and there is a solid economic case for a goal of 50 percent reductions by 2050. An important caveat is that although reaching the goal requires participation, the distribution of emissions is sufficiently concentrated that engaging countries like Brazil, China, India, and Russia will go a long way toward achieving that goal.
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