Subgame-perfect cooperative agreements in a dynamic game of climate change

We model climate change as a dynamic game and prove existence of a unique subgame-perfect Nash equilibrium (SPNE) that is also Markov perfect. We interpret this unique SPNE as the business-as-usual (BAU) equilibrium and show that if the countries are not sufficiently symmetric then the familiar trigger strategy equilibria may not be Pareto improvements over the BAU equilibrium and may even lack efficiency properties. We then motivate and introduce a subgame-perfect cooperative agreement as an improvement over the BAU equilibrium in the sense that every country or coalition of countries is better off in every subgame, irrespective of the extent of heterogeneity of the countries. We characterize subgame-perfect cooperative agreements and identify sufficient conditions for their existence. We show that (direct or indirect) transfers between countries to balance the costs and benefits of controlling climate change are a necessity and not a matter of approach.     

Benefits and ancillary costs of natural infrastructure: Evidence from the New Jersey coast

This paper empirically estimates the economic impacts of a large-scale public investment in natural infrastructure aimed at adapting to climate change and increasing coastal resilience. I utilize temporal and spatial variation in investment in dunes to provide a hedonic property value estimate of the economic benefits. I identify the net effect of treatment utilizing the doubly robust Oaxaca-Blinder estimator and show that coastal housing price increases attributable to constructed dunes are approximately 3.6%. A decomposition of the average impact suggests that the policy intervention generates ancillary costs related to impaired ocean views and privacy concerns that partially offset large protection benefits.     

Foreword

We provide an introduction to the volume The Arctic in the Earth System perspective: the role of tipping points. The terms tipping point and tipping element are described and their role in current science, general debates, and the Arctic are elucidated. From a wider perspective, the volume focuses upon the role of humans in the Arctic component of the Earth system and in particular the envelope for human existence, the Arctic ecosystems. The Arctic climate tipping elements, the tipping elements in Arctic ecosystems and societies, and the challenges of governance and anticipation are illuminated through short summaries of eight publications that derive from the Arctic Frontiers conference in 2011 and the EU FP7 project Arctic Tipping Points. Then some ideas based upon resilience thinking are developed to show how wise system management could ease pressures on Arctic systems in order to keep them away from tipping points.     

Detecting and Coping with Disruptive Shocks in Arctic Marine Systems: A Resilience Approach to Place and People

It seems inevitable that the ongoing and rapid changes in the physical environment of the marine Arctic will push components of the region’s existing social-ecological systems—small and large—beyond tipping points and into new regimes. Ongoing changes include warming, freshening, acidification, and alterations to food web structure. In anticipation we pose three distinct but interrelated challenges: (1) to explore existing connectivities within components of the marine system; (2) to seek indicators (if they exist) of approaching regime change through observation and modeling; and (3) to build functional resilience into existing systems through adaptation-oriented policy and to have in hand transformative options when tipping points are crossed and new development trajectories are required. Each of the above challenges is scale dependent, and each requires a much deeper understanding than we currently have of connectivity within existing systems and their response to external forcing. Here, we argue from a global perspective the need to understand the Arctic’s role in an increasingly nonlinear world; then describe emerging evidence from new observations on the connectivity of processes and system components from the Canada Basin and subarctic seas surrounding northern North America; and finally posit an approach founded in “resilience thinking” to allow northern residents living in small coastal communities to participate in the observation, adaption and—if necessary—transformation of the social-ecological system with which they live.     

Assessment of the Netherlands’ Flood Risk Management Policy Under Global Change

Climate change and sea level rise urge low-lying countries to draft adaption policies. In this context, we assessed whether, to what extent and when the Netherlands’ current flood risk management policy may require a revision. By applying scenarios on climate change and socio-economic development and performing flood simulations, we established the past and future changes in flood probabilities, exposure and consequences until about 2050. We also questioned whether the present policy may be extended much longer, applying the concept of ‘policy tipping points’. Climate change was found to cause a significant increase of flood risk, but less than economic development does. We also established that the current flood risk management policy in the Netherlands can be continued for centuries when the sea level rise rate does not exceed 1.5 m per century. However, we also conclude that the present policy may not be the most attractive strategy, as it has some obvious flaws.     

A Multivariate Baltic Sea Environmental Index

Since 2001/2002, the correlation between North Atlantic Oscillation index and biological variables in the North Sea and Baltic Sea fails, which might be addressed to a global climate regime shift. To understand inter-annual and inter-decadal variability in environmental variables, a new multivariate index for the Baltic Sea is developed and presented here. The multivariate Baltic Sea Environmental (BSE) index is defined as the 1st principal component score of four z-transformed time series: the Arctic Oscillation index, the salinity between 120 and 200 m in the Gotland Sea, the integrated river runoff of all rivers draining into the Baltic Sea, and the relative vorticity of geostrophic wind over the Baltic Sea area. A statistical downscaling technique has been applied to project different climate indices to the sea surface temperature in the Gotland, to the Landsort gauge, and the sea ice extent. The new BSE index shows a better performance than all other climate indices and is equivalent to the Chen index for physical properties. An application of the new index to zooplankton time series from the central Baltic Sea (Latvian EEZ) shows an excellent skill in potential predictability of environmental time series.     

Impact of Climate Change on Ecological Quality Indicators and Biogeochemical Fluxes in the Baltic Sea: A Multi-Model Ensemble Study

Multi-model ensemble simulations using three coupled physical-biogeochemical models were performed to calculate the combined impact of projected future climate change and plausible nutrient load changes on biogeochemical cycles in the Baltic Sea. Climate projections for 1961-2099 were combined with four nutrient load scenarios ranging from a pessimistic business-as-usual to a more optimistic case following the Helsinki Commission's (HELCOM) Baltic Sea Action Plan (BSAP). The model results suggest that in a future climate, water quality, characterized by ecological quality indicators like winter nutrient, summer bottom oxygen, and annual mean phytoplankton concentrations as well as annual mean Secchi depth (water transparency), will be deteriorated compared to present conditions. In case of nutrient load reductions required by the BSAP, water quality is only slightly improved. Based on the analysis of biogeochemical fluxes, we find that in warmer and more anoxic waters, internal feedbacks could be reinforced. Increased phosphorus fluxes out of the sediments, reduced denitrification efficiency and increased nitrogen fixation may partly counteract nutrient load abatement strategies.     

Climate Change Impact on Riverine Nutrient Load and Land-Based Remedial Measures of the Baltic Sea Action Plan

To reduce eutrophication of the Baltic Sea, all nine surrounding countries have agreed upon reduction targets in the HELCOM Baltic Sea Action Plan (BSAP). Yet, monitoring sites and model concepts for decision support are few. To provide one more tool for analysis of water and nutrient fluxes in the Baltic Sea basin, the HYPE model has been applied to the region (called Balt-HYPE). It was used here for experimenting with land-based remedial measures and future climate projections to quantify the impacts of these on water and nutrient loads to the sea. The results suggest that there is a possibility to reach the BSAP nutrient reduction targets by 2100, and that climate change may both aggravate and help in some aspects. Uncertainties in the model results are large, mainly due to the spread of the climate model projections, but also due to the hydrological model.     

Reconstructing the Development of Baltic Sea Eutrophication 1850–2006

A comprehensive reconstruction of the Baltic Sea state from 1850 to 2006 is presented: driving forces are reconstructed and the evolution of the hydrography and biogeochemical cycles is simulated using the model BALTSEM. Driven by high resolution atmospheric forcing fields (HiResAFF), BALTSEM reproduces dynamics of salinity, temperature, and maximum ice extent. Nutrient loads have been increasing with a noteworthy acceleration from the 1950s until peak values around 1980 followed by a decrease continuing up to present. BALTSEM shows a delayed response to the massive load increase with most eutrophic conditions occurring only at the end of the simulation. This is accompanied by an intensification of the pelagic cycling driven by a shift from spring to summer primary production. The simulation indicates that no improvement in water quality of the Baltic Sea compared to its present state can be expected from the decrease in nutrient loads in recent decades.     

The Impact of First-Generation Biofuels on the Depletion of the Global Phosphorus Reserve

The large majority of biofuels to date is "first-generation" biofuel made from agricultural commodities. All first-generation biofuel production systems require phosphorus (P) fertilization. P is an essential plant nutrient, yet global reserves are finite. We argue that committing scarce P to biofuel production involves a trade-off between climate change mitigation and future food production. We examine biofuel production from seven types of feedstock, and find that biofuels at present consume around 2% of the global inorganic P fertilizer production. For all examined biofuels, with the possible exception of sugarcane, the contribution to P depletion exceeds the contribution to mitigating climate change. The relative benefits of biofuels can be increased through enhanced recycling of P, but high increases in P efficiency are required to balance climate change mitigation and P depletion impacts. We conclude that, with the current production systems, the production of first-generation biofuels compromises food production in the future.