COST OF INACTION AND COSTS OF ACTION IN CLIMATE PROTECTION ASSESSMENT OF COSTS OF INACTION OR DELAYED ACTION

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1 COST OF INACTION AND COSTS OF ACTION IN CLIMATE PROTECTION ASSESSMENT OF COSTS OF INACTION OR DELAYED ACTION OF CLIMATE PROTECTION AND CLIMATE CHANGE Pof. D. Claudia Kemfe Kaja Schumache Geman Insiue fo Economic Reseach and Humbold Univesiy Belin Summay T he ulimae objecive of he climae convenion and of elaed insumens like he Kyoo poocol is o educe geenhouse gas emissions o a level ha avoids dangeous climae change. In ode o consideably educe isks of climae change, he Euopean Union aleady decided a climae poecion age: o peven global suface empeaue o incease moe han 2 C (Celsius) compaed o pe indusial levels. The numbe and inensiy of exeme weahe evens, such as flooding caused by heavy pecipiaion, hea waves and big soms has consideably inceased in he pas. Wih a empeaue incease of ove 2 C he pobabiliy of even moe fequen heavy climae evens could ise subsanially. Big e-insuance companies, such as he MunichRe, figued ou ha exeme weahe evens have isen by a faco 3.1 since This has led o dasic gowh in boh economic and insued losses. Fo example, he flooding in Euope in he yea 2003 caused losses of 9.3 billion Euos only in Gemany. This sudy aims a calculaing he coss of inacion, i.e. when no climae policy akes place, conased wih he coss of acion, i.e. he coss of climae policy. We inend o shed some ligh on wha migh happen if concee climae policy saed oday o saed a a lae poin of ime. In paicula, we ae ineesed in he coss of inacion, and hus he poenial economic damages fom climae change. Fo his, we apply a wold economic model ha includes damage funcions and economic ineelaions fom climae impacs. We assess he poenial impacs of climae change and povide some sensiiviy analyses wih espec o he assumpions on he eacion of he climae sysem. The main difficulies wih such quaniaive impac sudies lie in he moneay valuaion of damages fom climae change and in egional as well as in empoal diffeences of acion and impac. Miigaion coss and ancillay benefis as well as adapaion coss and benefis ypically accue in he same egion. Howeve, his is no ue fo miigaion benefis: local o egional emissions educion effos esul in globally and empoally dispesed benefis. Benefis of avoided climae change impacs amass much lae han he coss of miigaion (OECD 2004). Impac assessmen sudies mos ofen only evaluae esponses o changes in mean climae and no hose associaed wih abup changes o exeme evens. Fuhemoe, moneising damages of goods like biodivesiy o healh is vey poblemaic as he unceainies ae vey lage and inheen value judgemens canno objecively be made. This pape assesses and compaes he coss and benefis of climae poecion, i.e. he coss of inacion, which include climae damages, adapaion coss on he one hand wih he coss of acion, i.e. miigaion coss on he ohe hand. We apply a scenaio appoach wih which we compae diffeen emissions sabilisaion scenaios o a efeence case. The assessmen of he coss of inacion is based on a globally vey aggegaed and simplified damage appoach, which cucially depends on he paamee values aken ino accoun

2 The scenaios aim a avoiding a global suface empeaue incease of moe han 2 Celsius (C) compaed o peindusial levels. Especially we assess a efeence scenaio whee no climae poecion o emission miigaion acions ake place and wo miigaion scenaios: scenaio one ealy Acion (ScenA) inends no o oveshoo he 2 C limi, scenaio wo delayed Acion (ScenB) sas wih dasic emission educion effecs a a lae ime peiod (2030). I uns ou ha only wih ealy emission educion waming beyond he limi of 2 C can be avoided. Even dasic emissions educion effos saing a a lae poin of ime (2030) will no be sufficien o say wihin he 2 C limi. Damages fom climae change ae lowe if he limi is me. The coss of acion ae subsanial. Howeve, he avoided damage coss ae even highe han he coss of acion. This is paiculaly he case when emission educion effos ae posponed o lae ime peiods. Boh policy scenaios povide benefis in ems of avoided damages. ScenA leads o highe posiive effecs han ScenB in ems of goss wold poduc (GWP) because he avoided damages ae highe and ovecompensae he miigaion coss. Inoducion The numbe and inensiy of exeme weahe evens, such as flooding caused by heavy pecipiaion, hea waves and big soms has consideably inceased in he pas. Wih a empeaue incease of ove 2 C he pobabiliy of even moe fequen heavy climae evens could ise subsanially. Big e-insuance companies, such as he MunichRe, figued ou ha exeme weahe evens have isen by a faco 3.1 since This has led o dasic gowh in boh economic and insued losses. Fo example, he flooding in Euope in he yea 2003 caused losses of 9.3 billion Euos only in Gemany. The ulimae objecive of he climae convenion (A. 2) and elaed insumens like he Kyoo poocol is o educe geenhouse gas emissions o a level ha avoid dangeous climae change. In ode o educe isks of climae change consideably, he Euopean Union aleady decided a climae poecion age: o avoid global suface empeaue incease of moe han 2 C compaed o pe-indusial levels. The empeaue age has been epeaedly eieaed by he Envionmenal Council since 1996, and, in Mach 2005, also by he Heads of Govenmen of he EU. Howeve, even an incease of he global empeaue by 2 C compaed o he pe- indusial level leads o subsanial climae impacs, such as on ecosysems and wae scaciy. In ode o say wihin he empeaue limi of 2 C wih high likelihood, a sabilisaion of geenhouse gas concenaions of 400 ppm would be necessay (Hae and Meinshausen 2004). Geenhouse gas emissions need o be educed dasically, globally by a leas 50% up o Afe he Russian aificaion of he Kyoo poocol, he Kyoo poocol eneed ino foce on 16 Febuay This also means ha in 2005 inenaional negoiaions fo fuhe emissions educion ages need o begin. The Geman govenmen is aiming fo an EU geenhouse gas emission educion age of 30% by 2020 compaed o 1990 emissions level and similaly ambiious ages fo ohe indusialised counies. Gemany would hen be pepaed o accep an emissions educions age of 40% by The Euopean sping council (Mach 2005) eaffimed ha he oveall global annual mean suface empeaue should no exceed 2 C above pe-indusial levels. Fuhemoe, he Council noes ha hee is inceasing scienific evidence ha he benefis of limiing oveall global annual mean suface empeaue incease o 2 C above pe indusial level ouweigh he coss of abaemen policies. The Council encouages consideing mid- o long-em saegies and ages (2020: %) and heefoe asked he Commission o coninue o wok on a cos benefi analysis of emissions educions saegies. The coss of climae poecion need o be compaed wih avoided damages, avoided adapaion coss and ancillay benefis (as fo example avoided ai polluion). Thee ae only a few quaniaive assessmen sudies ha evaluae he cos of inacion, i.e. he coss of climae change (e.g. Tol e al. 2004, Nodhaus and Boye 2000, Fankhause 1994, Hope Fo an oveview see fo example Piini and Rahman 2004 and Schellnhube e al. 2004). The main difficulies wih such quaniaive impac sudies lie boh in egional as well as imely diffeences. Miigaion

3 coss, adapaion coss and benefis and ancillay benefis ypically accue in he same egion. Howeve, his is no ue fo miigaion benefis: local o egional emissions educion effos esul in globally and imely dispesed benefis. Benefis of avoided climae change impacs amass much lae han he coss of miigaion (OECD 2004). Impac assessmen sudies mos ofen only evaluae esponses o changes in mean climae and no hose associaed wih abup changes o exeme evens. Fuhemoe, quaniaive impacs ae difficul o assess, as boh he evaluaion of nonmake impacs as well as he aggegaion of egional impacs is vey poblemaic. In paicula, moneising damages of goods like biodivesiy o healh is vey poblemaic as he unceainies (as fo example he chosen discoun ae) and impeciseness ae exaodinay lage. Because of hese difficulies cos benefi analyses alone ae no an appopiae ool fo he assessmen and deeminaion of saegies and ages fo climae poecion. This pape assesses and compaes he coss and benefis of climae poecion, by quanifying so called coss of inacion, i.e. climae damages and adapaion coss, on he one hand and he coss of acion, i.e. miigaion coss on he ohe hand. We compae he benefis of miigaion (ha means he avoided damages of climae change, avoided adapaion coss and ancillay benefis), wih he coss of acion, i.e. he coss of meeing concee emissions educions ages o say wihin he limi of 2 C global waming above pe-indusial levels. In paicula, we assess a efeence scenaio whee no climae poecion o emissions miigaion aciviies ake place and compae i wih wo miigaion scenaios: scenaio A ( ealy acion ) inends o avoid aveage global waming of moe han 2 C, scenaio B sas wih ae economically feasible a a lae ime peiod (2030) ( delayed acion ). Oveview of Impac Inegaed Assessmen- Sudies The majoiy of sudies in climae policy have focussed on he coss of climae policy, i.e. he coss of acion. To dae, deailed infomaion is available on he egional and global coss of vaious climae policies. Policy makes wan o compae hese coss o he benefis ha aise due o he climae policies hey iniiae. No many sudies so fa, howeve, have ackled he challenge of evaluaing he coss of inacion o he benefis of climae policies. Many poblems occu ha make a simple cos benefi analysis challenging. Those poblems elae o he dispesion of coss and benefis ove ime and space, o unceainies and he synhesis of quaniaive and qualiaive infomaion. This secion hus gives a deailed oveview of cuen eseach aciviies in his aea. Among he iniiaives, he mos compehensive one is he ecenly published OECD book on he benefis of climae change policies (2004). 1 The OECD book pesens a selecion of eview papes each focussing on diffeen aspecs of he benefis of miigaion policy. The sudy poins ou ha poblems wih coheen benefis eseach aise fo wo easons, paly due o lack of eseach and paly due o lack of synhesis of eseach ino some coheen measue o se of measues fo policymakes and he public o undesand and weigh he benefis. The goal, hus, is o povide a suvey of available infomaion and o se ou a famewok and pioiies fo fuue eseach wok. The oveall aim of he OECD iniiaive is o impove he infomaion on he benefis of climae policies fo policymakes. Seveal ineesing sudies exis ha focus on he quaniaive assessmen of he coss and benefis of miigaing climae change wih he help of inegaed assessmen models (e.g. Tol e al. 2004, Nodhaus and Boye 2000, Fankhause 1994, Hope 2004, ec.). The models diffe in hei egional, secoal and ime coveage and need o be seen in ligh of he model sucue, assumpions and unceainies as poined ou below. Fo a suvey and discussion of sudies using an inegaed assessmen appoach see also Piini and Rahman (2004) and Schellnhube e al. (2004). Climae change: Why bohe? The Inegovenmenal Panel on Climae Change (IPCC) in is Thid Assessmen Repo ses ou five easons fo concen elaing o I) he isks o unique and heaened sysems, II) he isks fom exeme climae evens, III) he disibuion of impacs, IV) o aggegae impacs and V) o isks fom fuue lage-scale disconinuiies, and assessed he 1 Tha is he benefis of avoiding climaic change and educing he likelihood of any esuling ne advese impac

4 links beween hose concens (o impacs) and global mean empeaue change in 2100 (see Figue 1). These can hen be linked again o diffeen emissions pahways o concenaion levels as fo example povided by he IPCC s Special Repo on Emissions Scenaios (SRES). (IPCC 2000) and sabilisaion scenaios based on hese SRES scenaios. I shows ha even a CO2-concenaion of 450ppm which is well known o be associaed wih high coss is likely o lead o an incease in global mean empeaue above 2 C compaed o 1990 (0.6 C have o be added o ge he waming above pe-indusial levels) (see also Hae and Meinshausen, 2004) and o subsanial impacs elaed o he easons of concen I and II and also some fo III and IV. The IPCC assessmen clealy eveals he high and mulidimensional unceainies ha exis egading any impac analysis. Impacs of climae change occu no only due o a change in mean climae (wame mean empeaue, meling of glacies and pole caps), bu also in due o changes in climae vaiabiliy and fequency and seveiy of exeme evens (such as he magniude and quaniy of doughs, soms and floods) and due o ievesible abup non-linea changes. I would mean ha he sysem - due o exenal foces - is pushed fom one equilibium o he ohe, hus cossing a heshold ha can lead o unpedicable and/o ievesible changes. Examples fo such evens ae a change in he hemohaline ciculaion in he Noh Alanic Ocean o he die-back of he Amazon foes, leading o a elease of he soed cabon hus enhancing global waming. Souce: IPCC (2001), Synhesis Repo. Figue 1. Relaing global mean empeaue change o easons fo concen Impac sudies so fa mos ofen focus on changes in mean climae only. Howeve, a numbe of sudies, among ohes by Schneide and Lane (2004), Naain and Fishe (2000), Baanzini e al. (2003), sugges ha accouning fo vaiabiliy in climae and abup non-linea change is likely o shif he opimal level of abaemen. Moeove, Schneide and Lane (2004) ague ha a educion of he likelihood of high consequence evens could be among he main benefis of ealy and singen GHG miigaion

5 Benefis Wha? Whee? When? Fo he assessmen of global miigaion policy benefis i is impoan o noe he vaious dimensions of benefis. Fisly, a common undesanding is needed wha kind of benefis may occu. Thee ae diec benefis of miigaion in he fom of avoided damages in, fo, example agiculual poducion, coasal and wae esouces, eesial ecosysems poduciviy, biodivesiy ec. In addiion, hee ae adapaion benefis, in fom of avoided adapaion coss, and indiec o ancillay benefis. Ancillay benefis of GHG miigaion exis in he fom of a educion of hamful ai polluans such as sulphu dioxide (SO2), niogen dioxide (NOx), volaile oganic compounds (VOC) and pimay paiculae mae (PM10). (Schellnhube e al. 2004) Cabon sequesaion echnologies ofen also emove ohe polluans fom he wase gas seam. A policy ha educes he use of fossil fuels has beneficial effecs in ems of miigaing boh climae change and egional scale/lage scale ai polluion. In addiion, consideable coss of fossil fuel anspos including damage coss fom accidens such as oil spills would be miigaed., Climae policy may also lead o a divesificaion of enegy souces, which would decease he economic and socieal sensiiviy o disupion of supply. The ohe dimensions of benefis elae o he disibuion ove space and ime. Miigaion effos undeaken now o a any poin in ime will lead o benefis ha paly aise a a much lae poin of ime. This equies a nomaive judgemen of he value of fuue geneaions when compaing he coss and benefis in pesen ime values. Fo economic analyses an appopiae discoun ae needs o be chosen. Apa fom he disibuion of coss and benefis ove ime, he long-em hoizon of climae change pesens anohe majo eseach challenge. Geenhouse gases, in paicula cabon, say in he amosphee fo vey long ime peiods, hus conibuing o climae change on a long-em scale. Thus emissions miigaed oday poduce benefis ha each fa ino and beyond he 21s cenuy. Any such longem analysis suffes fom vey high unceainies. Similaly o he ime dimension o inegeneaional aspecs, inageneaional o egional equiy of he disibuion of coss and benefis plays a majo ole. Miigaion coss and ancillay benefis ypically occu in he same locaion (o egion) whee miigaion effos ae aken. Similaly, adapaion coss and benefis accue in he vey same locaion. Howeve, miigaion coss and diec benefis fom miigaion ae no immediaely linked. Miigaion effos may ake place anywhee in he wold and educe global GHG concenaions. The benefis fom he educion in ems of avoided climae change impacs, howeve, may show a a vey diffeen locaion fom whee miigaion oiginaed. The challenge fo policy makes hus is o weigh he benefis of climae policy on a global scale ahe han a egional one. In his conex, equiy issues become of impoance as he vas majoiy of GHG emissions sem fom indusialized counies while he impacs of climae change ae expeced o hi less developed counies he hades. Figue 2 povides an oveview of how hose diffeen Souce: Molo and Agawala (2004) dimensions of miigaion and adapaion Figue 2. Miigaion and adapaion policy benefis ove space and ime policy benefis ae linked. Anohe disibuional aspec elaes o he secoal allocaion of climae change miigaion benefis. As he IPCC s five easons of concen show some secos o sysems will be affeced hade a lowe empeaue inceases han ohes

6 Hiz and Smih (2004) suvey he exising lieaue on global impac fom climae change by seco. The secos cove agiculual poducion, coasal esouces, wae esouces, human healh, enegy, eesial ecosysems poduciviy, foesy, biodivesiy, and maine ecosysems poduciviy. The suvey eveals ha some secos, such as coasal esouces, healh, maine ecosysems, and biodivesiy exhibi inceasing advese impacs. Inceasing advese impacs means hee ae sill advese impacs wih vey small inceases in global mean empeaue. These advese impacs incease wih highe global mean empeaues. The auhos (Hiz and Smih 2004) wee unable, howeve, o deemine whehe he advese impacs incease linealy o exponenially wih global mean empeaue. Ohe secos, such as agiculue, eesial ecosysems poduciviy and foesy exhibi paabolic elaionships beween empeaue incease and impac. This means ha a small incease in empeaue may exhibi posiive impacs while he impac uns advese fo lage inceases in empeaue. A which empeaue incease he inflecion poin occus diffes by seco as well as by egion and is difficul o deemine due o unceainies concening adapaion (agiculue) and he lack of sudies especially fo he lowe ange of empeaue change o compae wih (foesy). Fo he ohe secos, he auhos could no esablish a consisen paen beween empeaue and impac fom he exising daa. An oveview of hei findings ogehe wih hei assessmen of a level of confidence fo he decipheed elaionships is given in Table 1. Souce: Hiz and Smih (2004) Table 1. Summay of secoal damage elaionships wih inceasing empeaue Though posiive impacs appea a lowe levels of empeaue change in some secos and egions, eseach suggess negaive impacs as global mean empeaues incease beyond ceain levels. Acoss all secos one consisen paen among all sudies is an inceasingly advese impac beyond an appoximae incease in global mean empeaue of 3 o

7 4 C. A lowe levels of empeaue incease, howeve, a numbe of sudies show negaive impacs fo some secos. These conclusions need o be seen in ligh of he exising unceainies, including a lack of impac sudies fo he lowe empeaue ange and poblems of esimaing exising impac sudies, which peven hem fom idenifying a pecise ciical empeaue beyond which damages ae advese and inceasing. Hiz and Smih (2004) do no aemp o aggegae impacs acoss secos. This is because he esuls vay widely wihin sudies, fom scenaio o scenaio and beween sudies. The sudies do no analyse he same scenaios o use he same baselines and ae mos ofen based on diffeen unis. Also, hee ae impoan linkages beween secos (such as agiculue and wae esouces), which canno be accouned fo in individual seco sudies. Many sudies do no ake ino consideaion exeme evens o he possibiliy of abup non-linea disupion. Also, he assumpions on he speed and naue of economic and echnological developmen diffe by sudy and influence how vulneable sysems will eac o climae change. In addiion o hese concens, all of he above menioned aspecs and unceainies apply (egional and imely impacs, long em aspecs, kind of benefis ec.). Fom secoal o global, fom physical o economical: Aggegaion and moneizaion of impacs As climae change is a global poblem and he coss of climae policies (coss of acion) can elaively easy and meaningfully be expessed in economic unis (e.g. pice pe on of cabon), policymakes seek o compae hese coss wih he associaed global benefis of climae policies (coss of inacion). Howeve, while i is difficul o aggegae impacs acoss secos, giving impacs an economic value is seen o be even moe challenging. In addiion o all he unceainies menioned, an economic valuaion of climae change impacs ineviably implies value judgemens wih espec o which non-make impacs 2 o include and how o value hem, wih espec o pedicing how elaive and absolue impacs will develop ino he fuue and wih espec o aggegaing he coss of climae change acoss egions and counies (equiy weighing) and aggegaing acoss geneaions (discoun ae). Piini and Rahman (2004) povide an oveview of findings wih espec o maginal coss of climae change impacs (i.e. he social cos of cabon). The esimaes mainly esul fom analyses wih inegaed assessmen models (IAM). IAMs combine scienific and economic aspecs of climae change ino a single dynamic modelling famewok. They poduce esimaes fo he social coss of cabon eihe as shadow pices of cabon in compaing maginal abaemen coss o maginal damage coss o as aveage incemenal coss of a small peubaion in emissions fom a business as usual baseline. Piini and Rahman poin ou ha esuls fom IAMs ae diven by inheen value judgemens, which endes i difficul o compae cabon pice esimaes. In addiion, he IAMs suveyed diffe in hei egional aggegaion, in hei complexiy of climae and/o economic componens, in hei level of including non-make impacs, and in he assumpions on hei business as usual baseline. Tol (2004) sesses ha IAMs - in ode o assess absolue damage coss - need o esablish he fuue size of he populaion and he economic, naual, social and human capial socks a isk. Wih a imefame as long as global waming damages, no pedicion of fuue developmens can be done wih any confidence. Scenaios ae hus used o descibe possible fuues. They do no claim o descibe he mos likely fuue. Because of he use of hese scenaios, global waming damage assessmens have a coningen naue: hey ae coningen upon he assumpions embedded in socioeconomic scenaios, whehe explici o no In addiion, Piini and Rahman poin ou ha hee ae sevee limiaions in he coveage of some key climae change issues, such as he impacs of low-pobabiliy high-isk impacs, exeme weahe even, social coningen impacs and impacs in he aeas of biodivesiy, ecosysems. Thus, he social coss of cabon pesened in he following need o be seen in ligh of he shocomings. They will no epesen any ue value of he maginal damage coss unil hese issues ae bee undesood and supplemenay pobabilisic sensiiviy analyses ae undeaken and incopoaed ino he esimaes o accoun fo unceainies. 2 Non-make impacs ae impacs fo which a make pice does no exis, such as biodivesiy, ecosysems, healh, ouism, eceaion

8 Findings fom seveal eview sudies povide a ange of a possible cabon damage coss. In paicula, Piini and Rahman (2004) efe o esimaes fom he following sudies: Peace e al. (1996) eview exising sudies fo he IPCC 2nd assessmen epo and epo a ange of US$/C (ons of cabon) in 1990 pices (o US$/C in 2000 pices) elaing o cabon emissions fom Fo he peiod , he esimaes ange fom US$/C 1990 pices (and US$/C in 2000 pices). Social cos esimae incease ove ime, as maginal damage coss end o incease wih highe geenhouse gas concenaions. 8 majo sudies ae eviewed by Clakson and Deyes (2002) and eveal an esimaed ange of US$/C fo he global damage coss of cabon emissions. In eal ems hese numbe should be inceased by appoximaely 1.5 US$/C pe yea because he coss of climae change ae likely o incease ove ime. 24 esimaes fom 12 sudies ae eviewed in Peace (2003) and lead o a ange of 6-39 $/C fo he social pice of cabon. Tol (2003b) conducs a mea-analysis of 88 esimaes fom 22 published sudies fo he maginal social coss of cabon dioxide. He finds a vey wide and igh skewed disibuion of coss (see Figue 3), wih a mean a 104 US$/C. Weighing hese esimaes, Tol concludes ha he maginal coss may no exceed 50 US$/C and ae likely o be even lowe han ha. The weighs ae based on Tol s nomaive value judgemen. They ae applied o eflec diffeen qualiy levels of he esimaes and o accoun fo he fac ha hee ae goups of esuls in he daabase ha oiginae fom he same modelling execise and hus incopoae an inheen bias. Thus, he esuls need o be seen in ligh of he mehod and nomaive assumpions chosen by Tol. Souce: Tol (2003b). Noe: Tol (2003b) collecs 88 esimaes of maginal social cos of cabon dioxide figues, fom 22 sudies. As Tol noes, one would expec he epoed esimaes o vay consideably, wih high o low end maginal social cos esimaes anging fom USD 1666/C hough o USD 7/C. The pobabiliy densiy funcion in gey highlighs he full ange of he 88 esimaes. The combined pobabiliy densiy funcion appeas in black. Figue 3. Mea-analysis of 88 esimaes of he maginal social coss of cabon The ange of impacs of changes in global mean empeaue (up o 6 C) on global GDP is illusaed in Figue 4. 3 Fou scenaios fom hee sudies wih diffeen appoaches o aggegaing coss show a boad ange of possible damage coss. 3 The global GDP loss fo a specific ime peiod o poin in ime can be deduced fo each GHG concenaion scenaio in muliplying he social coss of cabon (in $/C) wih he amoun of global emissions (C) and compaing he esuling global oal coss wih global GDP o yield he pecenage global loss

9 I needs o be poined ou ha any such quaniaive assessmen and is inepeaion needs o seen in ligh of he undelying poblems and caveas as discussed above (such as diffeing model sucues, appoaches, and assumpions aken as well as diffeing ime hoizon, egions, secos, and kind of damages coveed). They do, howeve, seve as an illusaion of he ange of esuls fom such effos. Depending on he weighing faco used fo aggegaing coss acoss secos and egions, some sudies imply iniial aggegae benefis fom small changes in mean empeaue while ohes show subsanial damages even a low level of empeaue changes. Howeve, all fou scenaios consisenly show inceasing damages (in ems of GDP losses) fo highe magniudes of climae change. Souce: Tol e al Noe: Mendelsohn e al. (1997) aggegae impacs acoss diffeen egions weighed by egional oupu. Nodhaus and Boye (2000) aggegae eihe weighed by egional oupu o weighed by egional populaion. Tol (2002) aggegaes eihe by egional oupu o by equiy, ha is, by he aio of wold pe capia income o egional pe capia income. Figue 4. Impac of climae change as a funcion of he change in global mean empeaue Conclusions: Wha o daw fom he exising and whee o go fom hee? Despie hese challenges, he OECD sudy (2004) poins ou some geneal paens ha can be deeced in he lieaue 1. Some secos, such as agiculue, may expeience ne posiive impacs globally of a small amoun of climae change 2. Some secos show advese impacs even fo low levels of global waming (such as biodivesiy, healh, maine ecosysems) 3. No eseach indicaes any posiive impac fom climae change as empeaues incease beyond ceain levels. 4. Maginal advese impacs emeges acoss all secos fo a empeaue incease beyond 3-4 C in global mean empeaue 5. Numbe of sudies indicaes ha he economically opimal level of miigaion is inceased when accouning fo he isks of ievesible, abup climae change. Thus, calling fo moe invesmen in abaemen in he nea-em. A boad conclusion is ha sound summay esimaes of benefis in a single (moneay) measue o compae wih aggegae coss may no be adequae on hei own o infom policy decisions. Cos benefi mehods alone may be inadequae and should be complemened wih isk-based mehods (such as pobabilisic appoaches). The OECD sudy

10 calls fo a pesenaion of benefis in wo diffeen foms: moneised esimaes and physical impac esimaes. They poin ou ha a coheen se of indicaos and eseach saegy is needed. Such a saegy would involve he following seps: Fisly, global physical vaiables fo impacs should be eseached and idenified. Theeafe, egional physical vaiables should be ackled. These should be followed by an economic valuaion leading o a se of egional moneay vaiables. Finally, an aemp of moneised aggegae benefis assessmen can be undeaken. A modes and peliminay eseach goal heeby should be o have consisen and compaable egional infomaion so ha impacs associaed wih levels of global miigaion can be assessed. Climae Change- Exeme Weahe Evens The numbe and inensiy of exeme weahe evens, such as flooding caused by heavy pecipiaion, hea waves and big soms has inceased consideably. Table 2 illusaes exeme climae evens, he pobabiliy of occuence and poenial impacs. No only he numbe of exeme climae evens is expeced o incease bu also he inensiy, Exeme Climae Even Pobabiliy Impacs Highe max. Tempeaue. Moe Ho Days and Hea Waves ove nealy all land aeas Highe minimum Tempeaues, fewe cold days, fos days and cold waves ove nealy all land aeas Vey likely Vey Likely Inceased Incidence of Deahs and seious diseases in olde age goups and uban poo. Incease of Hea Sess in livesock and wildlife Shif of Touis Aeas Încease of isks of damages o a numbe of cops Reducion of Enegie Supply Reliabiliy Incease of Enegy Demand fo Cooling Deceased cold- elaed human Mobidiy and Moaliy Deceased Risks of Damages o a numbe of Cops, and inceased Risks o Ohes Exended Range and Aciviy of some pes and Disease Vecos Reduced Heaing Enegy Demand Inceased Flood, Landslide, Avalanche and Mudslide Damage Moe Inense Pecipiaion Evens Inceased Summe Dying ove mos Mid- Laiude Conienal Ineios and associaed Risks of Dough Vey Likely Likely Inceased Soil Eosion Inceased Flood Runoff could Incease Rechage of some Floodplain Aquifies Inceased Pessue on Govenmen and Pivae Flood Insuance Sysems Deceased Cop Yields Inceased Damage o Building Foundaions caused by goud Shinkage Deceased Wae Resouce Quaniy and Qualiy Inceased Risk of Foes Fie Incease in Topical Cyclone Peak Wind Inensiies, mean and peak pecipiaion inensiies Likely Inceased Risk o Human Life, Risk of Infecion Disease Epidemics and many ohe Risks. Ansieg de Risiken fü Kankheien und Epidemien Inceased Coasal Eosions and Damage o Coasal Buildings and Infasucue. Inceased Damage o Coasal Ecosysems such as Coal Reefs and Mongoves. Inensified Doughs and Floods associaed wih El Nino evens in many diffeen Regions Likely Deceased Agiculual and Rangeland Poduciviy in Gough- and Flood Pone Regions. Deceased Hydo- Powe Poenials in Dough pone Regions Inceased Asian Monsoon Pecipiaion Vaiabiliy Likely Incease in Flood and Dough Magniude and Damages in Tempeaue and Topical Asia Inceased Inensiy of mid- laiude soms Souce: IPCC (2001). Low Inceased Risk o Human Life and Healh Inceased Popey and Infasucue Losses Inceased Damage o Coasal Ecosysems Table 2 Pojeced Changes duing he 21s cenuy in exeme climae phenomena and hei likelihood

11 especially of exeme pecipiaion evens. Some egions (paiculaly poo egions) will and aleady have been moe songly affeced han ohe egions. I is expeced ha in he egion of Noh Ameica moe soms, huicanes and onados wih exeme wind inensiies will occu. In Asia floods ae moe likely o happen. In Euope, howeve, no only exeme hea waves o floods ae moe likely bu also soms, such as onados (MunichRe 2002). Table 3 shows he numbe of exeme weahe evens and hei Gea Weahe Disases Decade compaision economic and insued Faco losses fom 1950 unil las 10 Faco oday. As he figue Decade s : 60s 1960s shows, he numbe of Numbe ,8 3,1 exeme weahe evens Economic wen up dasically. losses Fom he 1960s o he Insued 1980s he numbe of losses 43,9 unknown 57,6 6,4 86,9 12,7 136,9 25,1 460,8 106,2 331,1 87,6 2,4 3,9 5,8 such evens wen up by a Losses in US$ bn (2004 values) faco of 2.8. Moeove, Table 3 Gea weahe disases wihin he las en yeas he numbe of exeme evens was as much as 3.1 imes highe han in he 1960s. This led o dasic inceases fo boh economic and insued losses (Table 3 and Figue 5). las 10: Exeme hea phenomena and pecipiaion evens also happened in Euope (including Gemany): in he summe of 2002 Middle and Easen Euope wee infesed by a flood caasophe, caused by heavy ainfalls. This exeme weahe even affeced he Easen and Souhen pa of Gemany, he Souh Wes of he Czech Republic and Ausia and Hungay caused by he song flooding of he main ives, Danube, Elbe, Moldau, Inn and Salzach. The flood hi Gemany, Ausia and he Czech Republic he hades. Economic damages amouned o up o 9.2 billion Euos in Gemany only. 4 Gea Weahe Disases Numbe of evens 13,6 MRNaCaSERVICEŖ Souce:2004 Geo Risks Reseach Dep., Munich Re Ohes Flood Som Numbe Figue 5: Gea weahe disases Geo Risks Reseach Dep., Munich Re 4 One of he lages e-insuance companies, he Munich Re assessed he damages associaed wih he flood, see Münchne Rück: Jahesückblick Naukaasophen 2002, München

12 Gea Weahe Disases Economic and insued losses Economic losses Insued losses 60 Billion US$ (2004 values) Souce: 2004 Geo Risks Reseach Dep., Munich Re Figue 6: Economic and insued losses of gea weahe disases In he summe of 2003, only one yea afe he big flood, Euope suffeed fom an exeme hea wave. The economic damages included inceased diseases (such as cadiovascula poblems o, fo example, malaia ha can occu also in he Euopean couny aea) and an inceased numbe of hea elaed deahs. Especially in Fance, he moaliy ae of eldely people inceased consideably in his peiod. Fuhemoe, damages of cop gains, disupion of enegy supply and an incease of foes fies, especially in Souhen Euope, ook place. 5 In oal, economic damages elaed o he Euopean hea wave can be assessed a 10 o 17 billion Euos. 6 Coss of Acion vesus Cos of Inacion of Climae Poecion- A Quaniaive Assessmen We assess he coss of acion, i.e. he coss of emissions educion, and he coss of inacion, i.e. he impacs of human induced climae change, wih he help of a quaniaive modelling ool (WIAGEM - Wold Inegaed Assessmen Geneal Equilibium Model). We compae hee scenaios: The efeence scenaio, which does no include any climae poecion measues. Scenaio A (ScenA, ealy acion ) limis he incease in global suface empeaue o 2 C, while Scenaio B (ScenB, delayed acion ) defes he inoducion of emissions educions o a lae poin of ime (2030). Hee, we assume ha concee emissions miigaion policies ha inend o each specific emissions educion ages sa afe No climae policy akes place befoe Ou analysis is pefomed using he muli-egional WIAGEM model. WIAGEM is an inegaed economy-enegyclimae model ha incopoaes economic, enegy and climaic modules in an inegaed assessmen appoach (Kemfe 2002a and 2002b). To evaluae make and non make coss and benefis of climae change, WIAGEM combines an economic model - wih special focus on he inenaional enegy make - wih a climae model ha accouns fo empeaue changes and sea level vaiaions. The design of he model focuses on mulilaeal ade flows. The epesenaion of economic aciviies is based on an ineempoal geneal equilibium appoach and conains he inenaional makes fo oil, coal and gas. The climaic model is based on geneal ineelaions beween enegy and 5 High wae empeaues of ives due o high ouside empeaues cause isks of inadequae cooling of nuclea eacos. In 2003, his iniiaed a shu down of nuclea powe plans in Gemany and Fance. 6 Tony Blai assessed he economic damages a abou 13.5 billion US$ and faaliies, see speech of he Biish Pime Minise on he occasion of he 10h annivesay of he Pice of Wales Business & he Envionmen Pogamme, London 14. Sepembe

13 non-enegy elaed emissions, empeaue changes and sea level vaiaions, all inducing subsanial make and nonmake damage cos economic impacs. WIAGEM accouns fo all six geenhouse gases (GHG) ha poenially influence global empeaue, sea level vaiaion and he assessed pobable impacs in ems of coss and benefis of climae change. Addiionally, he model includes ne changes in GHG emissions fom souces and emovals by sinks esuling fom land use change and foesy aciviies. Make and non-make damages ae evaluaed accoding o he damage coss appoaches of Tol (2002, 2003 and 2004) who calculaes diffeen damages of egional climae change. To assess impacs by climae change, we follow Tol s appoach (2003) o cove impacs on foesy, agiculue, wae esouces and ecosysem changes as an appoximaion of a linea elaionship beween empeaue changes, pe capia income o GDP and adapaion coss due o climae change. This means, inceased emissions lead o an incease of he global suface empeaue which causes global economic impacs. Regional economic imapcs depend on he counies economic pefomance and populaion developmen, i.e. pe capia income. Tol (2003) esimaes climae change impacs coveing a vaiey of climae change impacs. Along wih secoal impacs on agiculue, foesy, wae esouces and enegy consumpion, he coves impacs on ecosysems and moaliy due o veco bone diseases and cadiovascula and espiaoy disodes. In addiion o he damage cos assessmens of Tol, we implemen adapaion coss and addiional coss o he economy loweing ohe invesmens (cowding ou effec). We include he same egional damage funcions in ou model. Howeve, he damage funcions ae disaggegaed accoding o he specific so of damage (impacs on foesy, wae, moaliy). We assume ha hee is a funcional elaionship beween oveall empeaue change and egional economic income (see Annex). The model esuls diffe subsanially fom he findings of Tol (2004). This is because of wo main easons. Fis; we apply a fundamenally diffeen global economic appoach han Tol (2002) applies in his cos assessmen sudy. We use a global geneal equilibium appoach ha coves ineegional and inesecoal ade effecs, he uses a much simple appoach ha neglecs he ineegional ade effecs. The model applies a ecusive dynamic appoach so ha we cove feedback effecs fom damages o ohe shocks. This means, in each ime peiod (he model coves 5 yea ime inevals), impacs occu due o empeaue change and egional pe capia poduciviy change. This affecs he dynamic impacs in he model: if impacs of climae change occu counies face highe expendiues. These expendiues canno be spen as iniially planned (hus cowding ou invesmen). The main diffeence in he modelling famewok hee in compaison o Tol is ha we apply a ecusive dynamic appoach whee counies face impacs of climae change. Second, we include a deailed climae model ha assesses he empeaue changes fom emission pofiles (Kemfe 2002). Boh easons cause he fac ha he dynamic feedback effecs fom he climae and he economic sysem yield much highe damage coss as ealie sudies. In addiion o he pue economic income effecs we cove economc shocks due o adapaion. Counies spend a ceain amoun on adapaion when climae change occus. 7 These expendiues ae cowding ou invesmens ha canno be spen as peviously inended in a gowh model. Adapaion (o poecion coss) in WIAGEM mean coss ha occu o adap o damages. They do no peven fuue damages. Fuue damage coss ae only educed in he following way: wih less climae change by, fo example educed emissions, counies spend less poecion coss. Ancillay benefis ae elaed o he level of emissions. A educion in emissions implies highe ancillay benefis. We find ha hese effecs cause eacions on economic developmen. Figue 7 gaphically illusaes he modelling sucue and he ineacion of economic aciviies, enegy consumpion, climae and ecological impacs in WIAGEM. Unceainy abou he coec deeminaion of he model, daa and key paamees disos he undesanding of he social, economic and ecologic impacs of climae change. Unceainies could jusify posponing significan miigaion effos. Howeve, unceainy also includes he isk of significan climae 7 If climae change is educed (by fo example educed emissions), counies spend less pecenage of invesmens fo adapaion

14 changes ha induce consideable impacs. The unceainy abou daa qualiy is educed because he model is based on a deailed economic daabase epesening a well-known and scienifically acceped economic daabase. Model and paamee unceainies ae coveed by choosing an innovaive modelling appoach and by including paamee sensiiviy analysis. WIAGEM is a muli-seco, muli-egion dynamic ineempoal inegaed assessmen model. The model coves a ime hoizon of 100 yeas and solves in five-yea ime incemens. 8 The basic idea behind his modelling appoach is he evaluaion of make and non-make impacs induced by climae change. The economy is epesened by 25 wold egions, which ae fuhe aggegaed ino 11 ading egions fo his sudy (see Table 4). Poecion coss Economy 25 wold egions, 14 secos Enegy Consumpion Enegy make Poducion/Consumpion Endogenous echnological change Enegy elaedghg Emissions Non - Enegy elaedghg Emissions Climae: Tempeaue/ Sea Level Make Impacs Ecological impacs Welfae Non Make Impacs Figue 7 Modelling sucue in WIAGEM The economy of each egion is disaggegaed ino 14 secos, including five enegy secos: coal, naual gas, cude oil, peoleum and coal poducs, and eleciciy. Goods ae poduced fo he domesic and expo makes. The oupu of he non-enegy secos is aggegaed ino a non-enegy maco good. WIAGEM coves a poducion funcion ha allows fo (impefec) subsiuion beween he inpu goods, labou, enegy (i.e. coal, oil and gas) and capial (so called consan elasiciy of subsiuion CES poducion funcion). The subsiuion elasiciies ae cucial paamees of he model: if we allow fo a vey good subsiuion opion beween he individual enegy inpus, miigaion coss may be educed as counies simply subsiue coal wih gas. Vice vesa, if we allow fo low subsiuion opions, counies face highe miigaion coss, as i is moe difficul o subsiue fo example coal wih gas. 8 See Kemfe (2002b) fo a deailed model descipion

15 Inegaed Assessmen Model CGE Model: GTAP-E-L 25 wold egions/ 14 Secos Tade beween all secos Enegy: fossil-non fossil Climae Model: ICM CO2, N2O, CH4, ohe GHGses Tempeaue Radiaive Focing Impac funcion (egional): Economic Change X Pop.change X Vulneabiliy + Economic Damages (sochasic) + Adapaion Coss X Oveall empeaue change Figue 8: Inegaed Assessmen Model- Impac Assessmen The same funcional fom (CES) is assumed fo he household s uiliies: hey can choose beween cuen consumpion o savings, unde he consain of individual incomes. Also hee he subsiuion elasiciy is a cucial paamee, as wih high savings and low cuen consumpion economic gowh can be lowe. The basic assumpions fo he elasiciy values ae shown in Table 5. ASIA CHN CNA EU15 JPN LSA MIDE REC ROW SSA USA Regions India and ohe Asia (Republic of Koea, Indonesia, Malaysia, Philippines, Singapoe, Thailand, China, Hong Kong, Taiwan) China Canada, New Zealand and Ausalia Euopean Union Japan Lain Ameica (Mexico, Agenina, Bazil, Chile, Res of Lain Ameica) Middle Eas and Noh Afica Russia, Easen and Cenal Euopean Counies Ohe Counies Sub Sahaan Afica Unied Saes of Ameica Table 4 Definiions of counies and egions in WIAGEM

16 WIAGEM coves he opion o incease low cabon echnologies which lowes miigaion coss. Counies inves in R&D expendiues ha bings low cabon echnologies wih educed coss. Even hose counies can benefi by echnological changes ha do no incease hei expendiues in R&D by so called spillove effecs: if, fo example, Euope invens a new low cabon echnology, i will be expoed also o ohe counies (e.g. China). Type of elasiciy Value Amingon elasiciy of subsiuion 1 Amingon elasiciy of ansfomaion 2 Elasiciy of fossil fuel supply 1 (coal), 4 (gas, oil) Wold inees ae 2 Elasiciy of subsiuion beween non-enegy and enegy composie in poducion and final demand (Annex B), (non-annex B) Inefuel elasiciy of subsiuion 0.5 (final demand) 2 (indusy) Table 5 Key paamee of model WIAGEM In addiion o he non-enegy maco good, oil, coal and naual gas ae aded inenaionally. The global oil make is chaaceized by impefec compeiion o eflec he abiliy of he OPEC egions o use hei make powe o influence make pices. Coal is aded in a compeiive global make, while naual gas is aded in compeiive egional makes wih pices deemined by global o egional supply and demand. Enegy-elaed geenhouse gas emissions occu as a esul of enegy consumpion and poducion aciviies. WIAGEM includes all six geenhouse gases coveed unde he Kyoo Poocol: cabon dioxide (CO2), mehane (CH4), nious dioxide (N2O), and he fluoinaed gases HFC, PFC and SF6. Theeof he fis hee ae consideed o have he geaes impac on climae change ove he 100-yea peiod coveed by he model. Key assumpions abou he gases ae shown in Table 6. WIAGEM also coves non-enegy elaed emissions, we assume a consan gowh ae ove ime, see Table 6. Tace Gas CO2 CH4 N 2 0 Amospheic Concenaion Pe- Indusial (ppmv) 1992 (ppmv) Enegy elaed Emissions 1992 (billion ons) Gowh ae, pos 1992 Non-enegy elaed Emissions 1992 (billion ons) Gowh ae, pos 1992 Table 6: Summay key assumpions geenhouse gases Impacs of climae change cove make and non-make damages; he fome compise all secoal damages, poducion impacs, loss of welfae ec., while he lae conain ecological effecs such as biodivesiy losses, migaion, and naual disases. To assess impacs by climae change, we follow Tol s appoach (2002) o cove impacs on foesy, agiculue, wae esouces and ecosysem changes as an appoximaion of a linea elaionship beween global empeaue changes, pe capia income o GDP and adapaion coss due o climae change. We esimae climae change vulneabiliy coveing a compehensive evaluaion of divese climae change impacs. Along wih secoal impacs on agiculue, foesy, wae esouces and enegy consumpion, he coves impacs on ecosysems and moaliy due o veco bone diseases and cadiovascula and espiaoy disodes (see Appendix I fo moe deails). We assume ha hee is a funcional elaionship beween global 9 Souce: IPCC (1990) and IPCC (1992)

17 empeaue change, egional populaion change and economic income change ha affecs he impacs on ecosysems, foesy, healh and wae. We fuhemoe assume ha enegy consumpion, hee space heaing and cooling, depends on he economic income, enegy poduciviy and oveall empeaue change (see Annex fo deailed mahemaical descipion and paamees): Tha means, wih inceasing global empeaue impacs of climae change incease, depending on he egional economic pefomance of a couny (pe capia income) and he populaion developmen. We assume a linea elaionship beween empeaue change and climae change impac on foesy and wae. Enegy consumpion fo heaing and cooling depends on he empeaue developmen, populaion and income change, and echnological pogess wihin he enegy seco. The loss of ecosysems depends on he pe-capia income change and populaion change. We fuhemoe assume a non-linea elaionship beween healh 10 (moaliy) and egional empeaue change and income. The main shocoming of his appoach (fom Tol coveed in his sudy) is he assumpion of a global suface empeaue ha leads o egional impacs, and no a egional empeaue developmen. Only fo he impac assessmen of healh and moaliy we accoun fo egional empeaue weighs. We apply he same funcional elaionships as Tol (2004) who assesses economic impacs of climae change on ecosysems, foesy, wae and healh. He applies damage funcions ha elae on he global empeaue change (no egional empeaue change) and he pe capia economic pefomance of a egion. Howeve, as we apply a fundamenally diffeen economic model, ou model esuls show ha damage assessmens ae much highe han ealie sudies. Mos of he pevious Inegaed Assessmen sudies (Nodhaus 1991, Cline 1992) assume one damage funcion fo he global assessmen of damages. Tol (2002) fisly assessed egional damages in elaion wih global suface empeaue and egional pe capia pefomance. We apply he same funcional elaionship fo he secos ecosysem, foesy, wae and moaliy (paamees see Appendix). Howeve, we cove deailed and disaggegaed dynamic economic and climae feedback effecs. Two main easons lead o diffeen damage effecs han pevious sudies: Fis, we cove a deailed CGE model ha incopoaes ineegional and inesecoal ade effecs and dynamic invesmen decisions. Second, mos inegaed assessmen models so fa include one aggegae damage funcion fo he wold and do no disaggegae egional impacs. In his model appoach, we assume ha egional impacs of climae change ae caused by he oveall (global) empeaue changes, income changes of a couny and egional populaion. We hen sum up all impacs. Howeve, egional diffeences in climae change ae no accouned fo. Model Resuls This chape pesens ou model esuls on he coss and benefis of climae policy. The fis secion highlighs pevious esimaes fom compaable sudies. Ou esuls ae hen pesened in ligh of hose esimaes. Resuls fom Compaable Sudies Quaniaive modelling sudies cucially depend on he assumpions abou economic developmen, he incopoaion of dynamic ineelaions, he aggegaion level, ime and he climae heshold. Fuhemoe, he Figue 9 Damage funcions assumpions abou damages of climae change significanly affec he quaniaive impac assessmen. Souce: Molo and Agawala (2004), Chape 1 OECD sudy Wihin he eesial ecosysem poduciviy aea, a paabolic damage funcion is seen o be mos ealisic, as especially in he sho em ime hoizon benefis fom climae change migh be mos likely (Molo and Agawala, 2004). Mos sudies assume a linea elaionship beween empeaue change in ime and impacs on healh, biodivesiies, maine ecosysems and 10 Alhough hee exis moe ecen sudies ha esimae an economic gowh educion of malaia disease alone by 1 % pe yea, we sill sick o he chosen elaionship wih less dasic impac assumpions, see Malaney e al (2004)

18 coass. Sill highly unceain ae impacs on wae and enegy. As some model sudies only incopoae few aspecs, a compaison of impac assessmen sudies becomes vey challenging. The ange of unceainies elaed o impac assessmen sudies is vey high. Make and non-make impacs esimaes vay widely beween individual sudies (OECD 2004). Souce: OECD (2003) Figue 10. Range of majo unceainies in impac assessmens In his sudy, we incopoae boh make and non-make impacs. Make impacs ae efleced in a vey deailed way as we apply a disaggegaed CGE model ha cove he main economic egions of he wold ha ae linked via bilaeal ade flows. Souce: IPCC (2001) and Weyan (1999) Figue 11. Global Miigaion Coss as GDP losses and maginal coss of diffeen global models

19 Non-make impacs ae included by a vey aggegaed funcional elaionship, ha ceainly cucially depends on he key assumpions and paamees. Also, impacs fom damages ae coveed based on secoal and egional damage funcions ha depend on global empeaue and egional economic income and populaion changes. As egional climae change is no aken ino accoun, and damage funcions ae vey aggegaed and sylised, his is sill a vey ough global esimae of impacs. Global miigaion coss assessmens diffe widely, as model consucions, assumpions and paameeizaion divege subsanially. IPCC (2001) summaised abaemen coss as pecenage of GDP of diffeen egions. An emissions ading sysem educes coss consideably. Model Calculaions This secion pesens ou model calculaions. We compae he benefis and coss of climae poecion, ha is, on he one hand he avoided climae damages and adapaion coss as well as he ancillay benefis, on he ohe hand i.e. he coss of emissions miigaion elaed o avoiding global mean waming by moe han 2 C. Especially, we assess a efeence scenaio whee no climae poecion o emission miigaion acions ake place and wo miigaion scenaios: Scenaio one ealy Acion (ScenA) aim a avoiding a global suface empeaue incease of moe han 2 C compaed o pe-indusial levels, while scenaio wo delayed acion (ScenB) sas wih dasic emission educion policies a a lae ime peiod (2030) esuling in much highe levels of emissions and empeaue incease houghou he enie ime hoizon of 100 yeas. Fuhemoe, we assume in ScenA and ScenB a climae sensiiviy of 2.8 C (see Appendix I). In an addiional sensiiviy analysis, we compae he esuls wih hose fo a high climae sensiiviy (HCS-4.2 C) and a low climae sensiiviy (LCS- 1.5 C). Scenaio Descipion Emission Miigaion Climae Sa sensiiviy Scenaio A (ScenA) Now middle (2.8 C) Scenaio B (ScenB) 2030 middle (2.8 C) Scenaio B wih fase echnological 2030 middle (2.8 C) change (Scen-B-ITC) Scenaio A- high climae sensiiviy Now high (4.2 C) (ScenA-HCS) Scenaio A- low climae sensiiviy 2030 low (1.5 C) (ScenA-LCS) Scenaio B- high climae sensiiviy 2030 high (4.2 C) (ScenB-HCS) Scenaio B- low climae sensiiviy 2030 low (1.5 C) (ScenB-LCS) Table 7. Scenaio descipion