Optimal learning on climate change: Why climate skeptics should reduce emissions

Climate skeptics typically argue that the possibility that global warming is exogenous, implies that we should not take additional action towards reducing emissions until we know what drives warming. This paper however shows that even climate skeptics have an incentive to reduce emissions: such a directional change generates information on the causes of global warming. Since the optimal policy depends upon these causes, they are valuable to know. Although increasing emissions would also generate information, that option is inferior due its irreversibility. We show that optimality can even imply that climate skeptics should actually argue for lower emissions than believers.     

Learning and climate feedbacks: Optimal climate insurance and fat tails

We study the effect of potentially severe climate change on optimal climate change policy, accounting for learning and uncertainty in the climate system. In particular, we test how fat upper tailed uncertainty over the temperature change from a doubling of greenhouse gases (the climate sensitivity), affects economic growth and emissions policy. In addition, we examine whether and how fast uncertainties could be diminished through Bayesian learning. Our results indicate that while overall learning is slow, the mass of the fat tail diminishes quickly, since observations near the mean provide evidence against fat tails. We denote as “tail learning” the case where the planner rejects high values of the climate sensitivity with high confidence, even though significant uncertainty remains. Fat tailed uncertainty without learning reduces current emissions by 38% relative to certainty, indicating significant climate insurance, or paying to limit emissions today to reduce the risk of very high temperature changes, is optimal. However, learning reduces climate insurance by about 50%. The optimal abatement policy is strongly influenced by the current state of knowledge, even though greenhouse gas (GHG) emissions are difficult to reverse. Once the mass of the fat tail diminishes, the remaining uncertainty is largely irrelevant for optimal emissions policy.     

Flattening the carbon extraction path in unilateral cost-effective action

Internalizing the global negative externality of carbon emissions requires the flattening of the extraction path of world fossil energy resources (=world carbon emissions). We consider governments with sign-unconstrained emission taxes at their disposal and seeking to prevent world emissions from exceeding some binding aggregate emission ceiling in the medium term. Such a ceiling policy can be carried out either in full cooperation or by a sub-global climate coalition. Unilateral action has to cope with carbon leakage and high costs, which makes a strong case for choosing a policy that implements the ceiling in a cost-effective way. In a two-country, two-period general equilibrium model with a non-renewable fossil-energy resource, we characterize the unilateral cost-effective ceiling policy and compare it with its fully cooperative counterpart. We show that with full cooperation there exists a cost-effective ceiling policy in which only first-period emissions are taxed at a rate that is uniform across countries. In contrast, the cost-effective ceiling policy of a sub-global climate coalition is characterized by emission regulation in both periods. The share of the total stock of energy resources owned by the sub-global climate coalition turns out to be a decisive determinant of the sign and magnitude of unilateral cost-effective taxes.     

Indexed regulation

Seminal work by Weitzman [Prices vs. quantities, Rev. Econ. Stud. 41 (1974) 477–491] revealed prices are preferred to quantities when marginal benefits are relatively flat compared to marginal costs. We extend this comparison to indexed policies, where quantities are proportional to an index, such as output. We find that policy preferences hinge on additional parameters describing the first and second moments of the index and the ex post optimal quantity level. When the ratio of these variables’ coefficients of variation divided by their correlation is less than approximately two, indexed quantities are preferred to fixed quantities. A slightly more complex condition determines when indexed quantities are preferred to prices. Applied to climate change policy, we find that the range of variation and correlation in country-level carbon dioxide emissions and GDP suggests the ranking of an emissions intensity cap (indexed to GDP) compared to a fixed emission cap is not uniform across countries; neither policy clearly dominates the other.     

Achievements,challenges and global implications of China’s carbon neutral pledge

China has been committed to achieving carbon neutrality by 2060. China’s pledge of carbon neutrality will play an essential role in galvanising global climate action, which has been largely deferred by the Covid-19 pandemic. China’s carbon neutrality could reduce global warming by approximately 0.2–0.3 °C and save around 1.8 million people from premature death due to air pollution. Along with domestic benefits, China’s pledge of carbon neutrality is a “game-changer” for global climate action and can inspire other large carbon emitters to contribute actively to mitigate carbon emissions, particularly countries along the Belt and Road Initiative (BRI) routes. In order to achieve carbon neutrality by 2060, it is necessary to decarbonise all sectors in China, including energy, industry, transportation, construction, and agriculture. However, this transition will be very challenging, because major technological breakthroughs and large-scale investments are required. Strong policies and implementation plans are essential, including sustainable demand, decarbonizing electricity, electrification, fuel switching, and negative emissions. In particular, if China can peak carbon emissions earlier, it can lower the costs of the carbon neutral transition and make it easier to do so over a longer time horizon. China’s pledge of carbon neutrality by 2060 and recent pledges at the 26^th UN Climate Change Conference of the Parties (COP26) are significant contributions and critical steps for global climate action. However, countries worldwide need to achieve carbon neutrality to keep the global temperature from growing beyond the level that will cause catastrophic damages globally.     

Assessing the carbon balance of circumpolar Arctic tundra using remote sensing and process modeling.

This paper reviews the current status of using remote sensing and process-based modeling approaches to assess the contemporary and future circumpolar carbon balance of Arctic tundra, including the exchange of both carbon dioxide and methane with the atmosphere. Analyses based on remote sensing approaches that use a 20-year data record of satellite data indicate that tundra is greening in the Arctic, suggesting an increase in photosynthetic activity and net primary production. Modeling studies generally simulate a small net carbon sink for the distribution of Arctic tundra, a result that is within the uncertainty range of field-based estimates of net carbon exchange. Applications of process-based approaches for scenarios of future climate change generally indicate net carbon sequestration in Arctic tundra as enhanced vegetation production exceeds simulated increases in decomposition. However, methane emissions are likely to increase dramatically, in response to rising soil temperatures, over the next century. Key uncertainties in the response of Arctic ecosystems to climate change include uncertainties in future fire regimes and uncertainties relating to changes in the soil environment. These include the response of soil decomposition and respiration to warming and deepening of the soil active layer, uncertainties in precipitation and potential soil drying, and distribution of wetlands. While there are numerous uncertainties in the projections of process-based models, they generally indicate that Arctic tundra will be a small sink for carbon over the next century and that methane emissions will increase considerably, which implies that exchange of greenhouse gases between the atmosphere and Arctic tundra ecosystems is likely to contribute to climate warming.     

Strategic climate policy with offsets and incomplete abatement: Carbon taxes versus cap-and-trade

This paper provides a first analysis of a “policy bloc” of fossil fuel importers which implements an optimal climate policy, faces a (non-policy) fringe of other fuel importers, and an exporter bloc, and purchases offset from the fringe. We compare a carbon tax and a cap-and-trade scheme for the policy bloc, in either case accompanied by an efficient offset mechanism for reducing emissions in the fringe. The policy bloc is shown to prefer a tax over a cap, since only a tax reduces the fuel export price and by more when the policy bloc is larger. Offsets are also more favorable to the policy bloc under a tax than under a cap. The optimal offset price under a carbon tax is below the tax rate, while under a cap and free quota trading the offset price must equal the quota price. The domestic carbon and offset prices are both higher under a tax than under a cap when the policy bloc is small. When the policy bloc is larger, the offset price can be higher under a cap. Fringe countries gain by mitigation in the policy bloc, more under a carbon tax since the fuel import price is lower.     

Study of county-level low-carbon standards in China based on carbon emissions per capita

ABSTRACT

Low-carbon development is an essential measure to combat climate change, and the establishment of low-carbon standards is an important means to achieve low-carbon development. Due to the differences in size and development level among counties of China, the applicability and fairness of county-level low-carbon standards are very important in this country. This study analyzed the trends of county-level carbon emissions in China, defined the peak value of carbon emissions per capita, summarized the characteristics of existing low-carbon standards, and proposed a fair county-level low-carbon standard based on carbon emissions per capita. The results of our analysis suggest that, under the constraints of carbon emissions reduction policies, China’s carbon emissions per capita will tend towards a stable range. Additionally, by referring to predictions results of the peak value of China’s carbon emissions per capita, it was determined that, in low-carbon development targets, China’s county-level carbon emissions per capita should be set within the range of 2–4 tons. Besides setting low-carbon standards, the Chinese government and private enterprises should develop low-carbon technologies as soon as possible and innovate management models to achieve the win–win situation of simultaneous economic growth and carbon emissions reduction.     

Brown backstops versus the green paradox

Anticipated climate policies are ineffective when fossil fuel owners respond by shifting supply intertemporally (the green paradox). This mechanism relies crucially on the exhaustibility of fossil fuels. We analyze the effect of anticipated climate policies on emissions in a simple model with two fossil fuels: one scarce and dirty (e.g. oil), the other abundant and dirtier (e.g. coal). We derive conditions for a ‘green orthodox’: anticipated climate policies may reduce current emissions. The model can also be used to analyze spatial carbon leakage. Calibrations suggest that intertemporal carbon leakage (from 0% to 8%) is a relatively minor concern.     

Net emissions of CH4 and CO2 in Alaska: implications for the region's greenhouse gas budget.

We used a biogeochemistry model, the Terrestrial Ecosystem Model (TEM), to study the net methane (CH4) fluxes between Alaskan ecosystems and the atmosphere. We estimated that the current net emissions of CH4 (emissions minus consumption) from Alaskan soils are approximately 3 Tg CH4/yr. Wet tundra ecosystems are responsible for 75% of the region's net emissions, while dry tundra and upland boreal forests are responsible for 50% and 45% of total consumption over the region, respectively. In response to climate change over the 21st century, our simulations indicated that CH4 emissions from wet soils would be enhanced more than consumption by dry soils of tundra and boreal forests. As a consequence, we projected that net CH4 emissions will almost double by the end of the century in response to high-latitude warming and associated climate changes. When we placed these CH4 emissions in the context of the projected carbon budget (carbon dioxide [CO2] and CH4) for Alaska at the end of the 21st century, we estimated that Alaska will be a net source of greenhouse gases to the atmosphere of 69 Tg CO2 equivalents/yr, that is, a balance between net methane emissions of 131 Tg CO2 equivalents/yr and carbon sequestration of 17 Tg C/yr (62 Tg CO2 equivalents/yr).     

气候变暖背景下森林土壤碳循环研究进展

由人类活动引起的温室效应以及由此造成的气候变暖对森林牛态系统的影响已引起人们的普遍关注.森林土壤碳循环作为全球碳循环的重要组成部分,是决定未来陆地牛物嘲表现为碳源/碳汇的关键环节,揭示这一作用对于准确理解全球变化背景下陆地生态系统碳循环过程具有重要的指导意义.本文主要通过论述影响土壤碳循环过程的5个方面(土壤呼吸、土壤微生物、土壤酶活性、凋落物输入与分解、土壤碳库),综述了近10 a来全球气候变暖对土壤碳循环过程的影响.近年来,尽管已开展了大量有关土壤碳循环对气候变暖的响应及反馈机制的研究,并取得了一定的成果,但研究结果仍然存在很大的不确定性.整合各种密切关联的全球变化现象,完善研究方法和实验手段,加强根际微生态系统碳循环过程与机理研究将是下一步研究的方向和重点.参70     

Emissions standards and ambient environmental quality standards with stochastic environmental services

Many important environmental policies involve some combination of emission controls and ambient environmental quality standards, for instance SO₂ emissions are capped under Title IV of the U.S. Clean Air Act Amendments while ambient SO₂ concentrations are limited under National Ambient Air Quality Standards (NAAQS). This paper examines the relative performance of emissions standards and ambient standards when the natural environment provides stochastic environmental services for assimilating pollution. For receiving media characterized by greater dispersion in the distribution of environmental services, the optimal emissions policy becomes more stringent, whereas the optimal ambient policy generally becomes more lax. In terms of economic performance, emissions policies are superior to ambient policies for relatively non-toxic pollutants, whereas ambient standards welfare dominate emissions standards for sufficiently toxic pollutants. In the case of combined policies that jointly implement emissions standards and ambient standards, we show that the optimal level of each standard relaxes relative to its counterpart in a unilateral policy, allowing for greater emissions levels and higher pollution concentrations in the environmental medium.     

Emissions standards and ambient environmental quality standards with stochastic environmental services

Many important environmental policies involve some combination of emission controls and ambient environmental quality standards, for instance SO₂ emissions are capped under Title IV of the U.S. Clean Air Act Amendments while ambient SO₂ concentrations are limited under National Ambient Air Quality Standards (NAAQS). This paper examines the relative performance of emissions standards and ambient standards when the natural environment provides stochastic environmental services for assimilating pollution. For receiving media characterized by greater dispersion in the distribution of environmental services, the optimal emissions policy becomes more stringent, whereas the optimal ambient policy generally becomes more lax. In terms of economic performance, emissions policies are superior to ambient policies for relatively non-toxic pollutants, whereas ambient standards welfare dominate emissions standards for sufficiently toxic pollutants. In the case of combined policies that jointly implement emissions standards and ambient standards, we show that the optimal level of each standard relaxes relative to its counterpart in a unilateral policy, allowing for greater emissions levels and higher pollution concentrations in the environmental medium.     

依靠科技进步 发展低碳农业

在全球携手应对气候变暖、减少温室气体排放的背景下,发展低碳经济是解决气候变化与经济发展矛盾的有效途径。通过描述气候变化、固碳减排对粮食安全、土壤碳汇、森林固碳、资源循环利用等影响和促进作用,深入分析发展低碳经济与可持续发展的关系,探讨如何在农业领域内开发高效循环生产体系,从而实现农业生产过程的固碳减排目的。由此,提出发展低碳农业是实现低碳经济的目标之一,它是一个复合技术体系,涉及了绿色农业、循环农业、生态文明、可持续发展理念。必须通过科学技术的突破,改造、提升低碳农业技术,改变农业现有的＂高能耗、高污染＂的生产状况,实现低碳生产、生活方式的转变。最后提出发展现代的低碳农业产业经济的对策和思考。     

A synthesis of current knowledge on forests and carbon storage in the United States

Using forests to mitigate climate change has gained much interest in science and policy discussions. We examine the evidence for carbon benefits, environmental and monetary costs, risks and trade-offs for a variety of activities in three general strategies: (1) land use change to increase forest area (afforestation) and avoid deforestation; (2) carbon management in existing forests; and (3) the use of wood as biomass energy, in place of other building materials, or in wood products for carbon storage. We found that many strategies can increase forest sector carbon mitigation above the current 162-256 Tg C/yr, and that many strategies have co-benefits such as biodiversity, water, and economic opportunities. Each strategy also has trade-offs, risks, and uncertainties including possible leakage, permanence, disturbances, and climate change effects. Because approximately 60% of the carbon lost through deforestation and harvesting from 1700 to 1935 has not yet been recovered and because some strategies store carbon in forest products or use biomass energy, the biological potential for forest sector carbon mitigation is large. Several studies suggest that using these strategies could offset as much as 10-20% of current U.S. fossil fuel emissions. To obtain such large offsets in the United States would require a combination of afforesting up to one-third of cropland or pastureland, using the equivalent of about one-half of the gross annual forest growth for biomass energy, or implementing more intensive management to increase forest growth on one-third of forestland. Such large offsets would require substantial trade-offs, such as lower agricultural production and non-carbon ecosystem services from forests. The effectiveness of activities could be diluted by negative leakage effects and increasing disturbance regimes. Because forest carbon loss contributes to increasing climate risk and because climate change may impede regeneration following disturbance, avoiding deforestation and promoting regeneration after disturbance should receive high priority as policy considerations. Policies to encourage programs or projects that influence forest carbon sequestration and offset fossil fuel emissions should also consider major items such as leakage, the cyclical nature of forest growth and regrowth, and the extensive demand for and movement of forest products globally, and other greenhouse gas effects, such as methane and nitrous oxide emissions, and recognize other environmental benefits of forests, such as biodiversity, nutrient management, and watershed protection. Activities that contribute to helping forests adapt to the effects of climate change, and which also complement forest carbon storage strategies, would be prudent.     

中国碳排放权交易市场运行状况、问题和对策研究

排污权交易理论的提出解决了发展经济与治理环境不能并行的难题。以欧盟碳排权交易体系为标志的世界范围内的碳排放权交易市场已逐步形成,碳排放权交易的实施减缓了全球气候变暖的速度,改善了人类赖以生存的生态环境,从长期看也促进了该政策实施地经济的发展。CDM机制下拥有世界上最大碳供应量的中国在国际碳排放权交易市场上却一直处于价格接受者的地位,辛苦的减排成果却给国外买家创造了丰厚的利润。国内有关碳排放权交易的理论研究与交易市场的试点运行早已在前几年展开,目前也取得了较大的进展。全国7个碳交易试点运行市场在2014年6月达到了交易的高峰期,交易量达到285.9227万吨,交易额达到了16398.2325万元。另据国家发改委统计,截至2014年10月,7个碳交易试点省市共完成交易1375万吨二氧化碳,累计成交金额超过5亿元人民币。然而这样的交易额对蕴含巨大减排潜力的中国而言远远不足,中国的碳排放权交易市场还不够成熟,试点地区的碳交易市场也比较分散,尚未形成全国统一的排放权交易市场。碳排放企业参与碳交易市场的积极性不足,导致碳排放配额流动性过低,市场交易量较低,交易市场的活跃度不够,这对想要在2016年运行全国统一性碳排放权交易市场的中国来说是一重大挑战。文章首先分析对比了国内外排污权交易市场的运行机制与现状,其次对目前中国7大碳排放交易试点地区的市场成交额与成交量等交易状况基础进行分析,找出碳排放交易市场发展缓慢的根本原因,结合碳排放权金融市场的发展与碳金融衍生产品的创新,为中国在国际排放权市场上赢得话语权以及争取是“十三五”期间构建相对成熟稳定的国内排放权交易市场的给出建议。     

广州社区居民通勤碳排放特征及其影响机理

通勤行为作为城市居民交通出行的主要组成部分,通勤碳排放的有效控制成为低碳交通发展的重点。以广州4个典型社区为例,构建结构方程模型,基于居民日常通勤行为的微观角度测算社区居民通勤碳排放,深入分析社区居民通勤碳排放的影响机理。结果表明：小汽车通勤成为居民高碳通勤的最主要因素;通勤距离和方式是决定社区居民通勤碳排放的两个直接影响因素;相对于个体社会经济属性和居民态度偏好来说,居住空间环境变量对于居民通勤碳排放的影响更为显著;居民态度偏好对于居民未来的通勤方式将起一定的作用,在公共交通通勤群体对小汽车通勤的强烈欲望以及小汽车通勤群体对小汽车通勤的行为依赖双重因素的推动下,若技术、政策和空间环境保持不变,随着经济社会的发展,未来通勤高碳化趋势明显。     

Understanding Recent Climate Change

Abstract:  The Earth's atmosphere has a natural greenhouse effect, without which the global mean surface temperature would be about 33 °C lower and life would not be possible. Human activities have increased atmospheric concentrations of carbon dioxide, methane, and other gases in trace amounts. This has enhanced the greenhouse effect, resulting in surface warming. Were it not for the partly offsetting effects of increased aerosol concentrations, the increase in global mean surface temperature over the past 100 years would be larger than observed. Continued surface warming through the 21st century is inevitable and will likely have widespread ecological impacts. The magnitude and rate of warming for the global average will be largely dictated by the strength and direction of climate feedbacks, thermal inertia of the oceans, the rate of greenhouse gas emissions, and aerosol concentrations. Because of regional expressions of climate feedbacks, changes in atmospheric circulation, and a suite of other factors, the magnitude and rate of warming and changes in other key climate elements, such as precipitation, will not be uniform across the planet. For example, due to loss of its floating sea-ice cover, the Arctic will warm the most .     

Announcing climate policy: Can a green paradox arise without scarcity?

Unintended consequences of a pre-announced climate policy are studied within a framework that allows for competition between polluting and clean energy sources. We show that early announcement of a carbon tax gives rise to a “green-paradox,” in that it increases emissions in the interim period (between announcement and actual implementation), irrespective of the scarcity of fossil fuels. The paradoxical outcome is driven by consumption-saving tradeoffs facing households who seek to smooth consumption over time and holds both when the announced implementation date is taken as a credible threat and when households are skeptical about the (political) will or capability of the government to implement the policy as announced.     

Risk aversion and CO2 regulatory uncertainty in power generation investment: Policy and modeling implications

We consider a simulation of risk-averse producers when making investment decisions in a competitive energy market, who face uncertainty about future regulation of carbon dioxide emissions. Investments are made under regulatory uncertainty; then the regulatory state is revealed and producers realize returns. We consider anticipated taxes, grandfathered permits and auctioned permits and show that some anticipated policies increase investment in the relatively dirty technology. Beliefs about the policy instrument that will be used to price carbon may be as important as certainty that carbon will be priced. More generally, a failure to consider risk aversion may bias policy analysis for the power sector.