The original article has been corrected: Legends in Fig. 7 in the article and legends in Figs. 9 and 10 of Supplementary Material 1 as well as contents in columns H and J of Supplementary Material 2 have been amended to the valid results.

Decarbonisation is harder for transport, heating, industry and agriculture. That is, a doubling of the decarbonisation rate requires much more than a doubling of the policy effort. The low-hanging fruit has been picked.

Nordhaus’ seminal DICE model assesses first-best climate policy, a useful but unrealistic yardstick. I propose a measure of policy inefficacy if carbon prices are heterogeneous and use observed prices to recalibrate the DICE model. I introduce a Niskanen-inspired model of climate policy with selfish bureaucrats, and calibrate it to carbon dioxide emissions in the European Union and the policy models used by the IPCC. This model also implies a measure of policy inefficacy that I use to recalibrate DICE. The optimal global mean temperature is 1°C perhaps 2°C higher in the recalibrated than in the original DICE model.

Early scholars were convinced that geography is destiny and that climate determines the human condition. Current economists by and large argue that institutions are destiny, and that the only thing that matters to humans is other human beings. Neither position is tenable. I review the literature and present new empirical evidence that shows that climate does have a significant effect on development, that this effect is mediated by institutions, and that the effect shrinks with affluence.

Complex physical models are the most advanced tools available for producing realistic simulations of the climate system. However, such levels of realism imply high computational cost and restrictions on their use for policymaking and risk assessment. Two central characteristics of climate change are uncertainty and that it is a dynamic problem in which international actions can significantly alter climate projections and information needs, including partial and full compliance of global climate goals. Here we present AIRCC-Clim, a simple climate model emulator that produces regional probabilistic climate change projections of monthly and annual temperature and precipitation, as well as risk measures, based both on standard and user-defined emissions scenarios for six greenhouse gases. AIRCC-Clim emulates 37 atmosphere-ocean coupled general circulation models with low computational and technical requirements for the user. This standalone, user-friendly software is designed for a variety of applications including impact assessments, climate policy evaluation and integrated assessment modelling.

Weitzman’s Dismal Theorem has that the expected net present value of a stock problem with a stochastic growth rate with unknown variance is unbounded. Cost-benefit analysis can therefore not be applied to greenhouse gas emission control. We use the Generalized Central Limit Theorem to show that the Dismal Theorem can be tested, in a finite sample, by estimating the tail index. We apply this test to social cost of carbon estimates from three commonly used integrated assessment models, and to previously published estimates. Two of the three models do not support the Dismal Theorem, but the third one does for low discount rates and most estimators. The meta-analysis does offer qualified support for the Dismal Theorem.

The paper presents the professor-student network of Nobel laureates in economics. 82 of the 87 Nobelists belong to one family tree. The remaining 5 belong to 3 separate trees. There are 376 men in the graph, and 5 women. Karl Knies is the central-most professor, followed by Wassily Leontief. No classical and few neo-classical economists have left notable descendants. Harvard is the central most university, followed by Chicago and Berlin. Most candidates for the Nobel prize belong to the main family tree, but new trees may arise for the students of Terence Gorman and Denis Sargan.

Probabilistic projections of baseline (with no additional mitigation policies) future carbon emissions are important for sound climate risk assessments. Deep uncertainty surrounds many drivers of projected emissions. Here, we use a simple integrated assessment model, calibrated to century-scale data and expert assessments of baseline emissions, global economic growth, and population growth, to make probabilistic projections of carbon emissions through 2100. Under a variety of assumptions about fossil fuel resource levels and decarbonization rates, our projections largely agree with several emissions projections under current policy conditions. Our global sensitivity analysis identifies several key economic drivers of uncertainty in future emissions and shows important higher-level interactions between economic and technological parameters, while population uncertainties are less important. Our analysis also projects relatively low global economic growth rates over the remainder of the century. This illustrates the importance of additional research into economic growth dynamics for climate risk assessment, especially if pledged and future climate mitigation policies are weakened or have delayed implementations. These results showcase the power of using a simple, transparent, and calibrated model. While the simple model structure has several advantages, it also creates caveats for our results which are related to important areas for further research.

The Bono Social de Electricidad (BSE) is a government programme, introduced in 2009, to reduce energy poverty in Spain. The BSE is a discount on the price of electricity, available to vulnerable households who applied. Applying differences-in-differences and propensity score matching to household data between 2008 and 2011, we find no statistically significant impact of the intention to treat on two indicators of energy poverty, viz. the ability to keep the house adequately warm, and the presence of damp walls, rotting windows and leaking roofs. This may be because eligible households did not apply. A third indicator, delays in paying electricity bills, showed a statistically significant deterioration. That is, the BSE has not reduced energy poverty, if anything it has made it worse. This is not because eligible households transferred income to relatives hit harder by the financial crises, but it may be because the BSE discount did not fully compensate for the cold of 2010.

Sea levels will rise, even with stringent climate change mitigation. Mitigation will slow the rate of rise. There is limited knowledge on how the costs of coastal protection vary with alternative global warming levels of 1.5 to 4.0 °C. Analysing six sea-level rise scenarios (0.74 to 1.09 m, 50th percentile) across these warming levels, and five Shared Socioeconomic Pathways, this paper quantifies the economic costs of flooding and protection due to sea-level rise using the Dynamic Interactive Vulnerability Assessment (DIVA) modelling framework. Results are presented for World Bank income groups and five selected countries from the present to 2100. Annual sea flood damage costs without additional adaptation are more influenced by socio-economic development than sea-level rise, indicating that there are opportunities to control risk with development choices. In contrast, annual sea dike investment costs are more dependent on the magnitude of sea-level rise. In terms of total costs with adaptation, upper middle, low middle and low income groups are projected to have higher relative costs as a proportion of GDP compared with high income groups. If low income countries protected now, flood costs could be reduced after 2050 and beyond. However, without further adaptation, their coasts will experience growing risks and costs leaving them increasingly reliant on emergency response measures. Without mitigation or adaptation, greater inequalities in damage costs between income groups could result. At country level, annual sea flood damage costs without additional adaptation are projected to rapidly increase with approximately 0.2 m of sea-level rise, leaving limited time to plan and adapt.

The Coase Theorem has a central place in the theory of environmental economics and regulation. Its applicability for solving real-world externality problems remains debated. We first place this seminal contribution in its historical context. We then survey the experimental literature that has tested the importance of the many, often tacit assumptions in the Coase Theorem. We discuss a selection of applications of the Coase Theorem to actual environmental problems, distinguishing between situations in which the polluter or the pollutee pays. Most substantive examples of Coase-like bargaining involve more than two parties. It is not clear whether the outcomes of these bargains were Pareto optimal rather than merely Pareto improving. While limited in scope, Coasian bargaining over externalities offers a pragmatic solution to problems that are difficult to solve in any other way.

The Euclidean length of a citation list is “depth relevant”: the metric increases when citations are transferred from less to more cited papers. We introduce “breadth relevance,” which favors consistent achievers over one‐hit wonders. The exponent of the CES aggregator then is less than unity rather than greater than unity, as for depth relevance. Using two datasets on citations of economists for the top 50 US and global universities, simply counting citations maximizes the correlation between the citation metrics of researchers and the peer‐reviewed rank of their department. However, citation depth may explain the allocation of researchers across lower‐ranked departments.

The mixed results in Pielke (2020) for natural disaster loss normalisation studies are due to methodological differences. Flaws exist in commonly used normalisation approaches that assume unitary elasticities between exposure indicators and losses. We refute Pielke’s arguments that statistical studies estimating these relationships are biased. We conclude with an agenda for future research.

Poorer, hotter countries are more vulnerable to climate change and will experience more negative impacts. The pattern of vulnerability between countries is used to impute impacts for income deciles within countries, for administrative regions, and for grid cells. Almost three‐quarters of people will face worse impacts than their country average. Between‐country variation is larger than within‐country variation for income deciles and regions, and about as large for grid cells. I here revisit earlier estimates of the economic impact of climate change and extend the analysis to impute the distribution of impacts within countries.

Through stylized damage functions, Integrated Assessment Models (IAMs) provide estimates of the economic costs that would occur for absolute changes in global temperature. In these damage functions, adaptation, sensitivity and their interactions are often combined in an intractable way. In this theoretical study we propose a new type of damage functions that allows mapping economic losses in terms of how extreme global temperature changes are in relation to a coping range representing the capacity of a system to deal with the climate conditions experience data particular period of time. In these new damage functions, which can be applied to the regional and global scales, adaptation to a changing climate is introduced by allowing the reference climate to be a function of time instead of a fixed quantity. Different formulations of damage functions discussed in the literature arise as special cases.

This paper uses imputed national climate change impact functions to estimate national social costs of carbon, which are largest in poor countries with large populations. The national social costs of carbon of faster growing economies are less sensitive to the pure rate of time preference and more sensitive to the rate of risk aversion. The pattern of national social costs of carbon is not sensitive to the assumed impact function, climate sensitivity, and scenario, although the global social cost of carbon is. Income convergence raises the national social costs of carbon of poorer countries, and lowers them for richer countries. Both global and national social costs of carbon are most sensitive to the income elasticity of climate change impacts, a parameter about which we know little.

This paper assesses the potential benefits of climate-change mitigation in reducing the impacts of sea-level rise over the 21st century in G-20 countries (excluding the European Union as a whole), using the Dynamic Interactive Vulnerability Assessment model. Impacts of the expected number of people flooded annually and wetland losses were assessed. To assess the benefits of mitigation, it was assumed that defences were not upgraded during the study. Globally, with a sea-level rise of 0.68 m by the 2080s (with respect to 1980–99), representing a potential future with limited climate-change mitigation, and with the Special Report on Emissions Scenarios A1 socio-economic scenario, 123 million additional people could be flooded annually and 39% of present global wetland stock could be lost. For a 0.19-m rise in sea level, associated with a substantial reduction in emissions, the number of people flooded could be reduced to 13 million/y, with 21% of global wetland stock loss, unless new wetlands emerge. Collectively, non-Annex 1 G-20 countries experience a disproportionately higher number of people flooded in their nations compared with the proportion of population flooded globally. The greatest wetland losses for G-20 countries are projected for Australia, Indonesia, and the United States. Thus, G-20 nations with the highest emissions or gross domestic product frequently do not experience the greatest impacts, despite some of these nations being potentially more able to pay for adaptation.

We examine the causal effects of the energy subsidy programme PetroCaribe in the three dimensions of sustainable development: economic, social and environmental. We use the synthetic control method to construct a counterfactual and compare it to the outcomes of the beneficiary countries and thus estimate the magnitude and direction of the PetroCaribe effect. PetroCaribe had a positive effect on economic growth in most of the beneficiary countries; however, this economic boost was not followed by an improvement in social development. Environmentally, PetroCaribe did not negatively or positively impact the environmental quality of the member countries, in the sense that we do not find a significant effect on the trend of urn:x-wiley:14636786:media:manc12275:manc12275-math-0001 emissions per capita.

The Netherlands is a delta country where water is usually abundant. Large investments in water infrastructure aim to prevent flooding, maintain shipping transport routes, irrigate farmland and ensure the health of polder lands and nature. During the limited periods when water is scarce, agriculture is low on the priority list for water allocation: farmers may be restricted in expanding irrigation operations or be even temporarily forbidden from using the equipment already installed. This comes at a cost to agricultural production. Water in this context is a unique economic input that is not privately owned, not always scarce, and not always allocated according to market principles. Nonetheless, the framework of a computable general equilibrium model (CGE) can be very effective in assessing economy-wide changes from periods of water scarcity and weighing this against policy initiatives to reduce water scarcity. In this chapter we explore adaptation possibilities to water scarcity from climate change with a particular focus on the challenges of interpretation of the CGE methodology for water in the context of the Netherlands.

The risk of malaria transmission worldwide is expected to increase with climate change. In order to estimate the welfare implications, we analyse the factors that explain willingness to pay to avoid malaria morbidity using a meta-analysis. We fail to replicate a previous meta-analysis, despite using a near-identical dataset. Thus, this paper outlines a more robust approach to analysing such data. We compare multiple regression models via a cross-validation exercise to assess best fit, the first in the meta-analysis literature to do so. Weighted random effects gives best fit. Confirming previous studies, we find that revealed preferences are significantly lower than stated preferences; and that there is no significant difference in the willingness to pay for policies that prevent (pre-morbidity) or treat malaria (post-morbidity). We add two new results to the morbidity literature: (1) Age has a non-linear impact on mean willingness to pay and (2) willingness to pay decreases if malaria policies target communities instead of individual households.

This paper develops a climate-economy model with uncertainty, irreversibility, and active learning. Whereas previous papers assume learning from one observation per period, or experiment with control variables to gain additional information, this paper considers active learning from investment in monitoring, specifically in improved observations of the global mean temperature. We find that the decision maker invests a significant amount of money in climate research, far more than the current level, in order to increase the rate of learning about climate change. This helps the decision maker make improved decisions. The level of uncertainty decreases more rapidly in the active learning model than in the passive learning model with only temperature observations. As the uncertainty about climate change is smaller, active learning reduces the optimal carbon tax. The greater the risk, the larger is the effect of learning. The method proposed here is applicable to any dynamic control problem where the quality of monitoring is a choice variable, for instance, the precision at which we observe GDP, unemployment, or the quality of education.

This paper assesses the potential benefits of climate-change mitigation in reducing the impacts of sea-level rise over the 21st century in G-20 countries (excluding the European Union as a whole), using the Dynamic Interactive Vulnerability Assessment model. Impacts of the expected number of people flooded annually and wetland losses were assessed. To assess the benefits of mitigation, it was assumed that defences were not upgraded during the study. Globally, with a sea-level rise of 0.68 m by the 2080s (with respect to 1980–99), representing a potential future with limited climate-change mitigation, and with the Special Report on Emissions Scenarios A1 socio-economic scenario, 123 million additional people could be flooded annually and 39% of present global wetland stock could be lost. For a 0.19-m rise in sea level, associated with a substantial reduction in emissions, the number of people flooded could be reduced to 13 million/y, with 21% of global wetland stock loss, unless new wetlands emerge. Collectively, non-Annex 1 G-20 countries experience a disproportionately higher number of people flooded in their nations compared with the proportion of population flooded globally. The greatest wetland losses for G-20 countries are projected for Australia, Indonesia, and the United States. Thus, G-20 nations with the highest emissions or gross domestic product frequently do not experience the greatest impacts, despite some of these nations being potentially more able to pay for adaptation.

UNESCO World Heritage sites (WHS) located in coastal areas are increasingly at risk from coastal hazards due to sea-level rise. In this study, we assess Mediterranean cultural WHS at risk from coastal flooding and erosion under four sea-level rise scenarios until 2100. Based on the analysis of spatially explicit WHS data, we develop an index-based approach that allows for ranking WHS at risk from both coastal hazards. Here we show that of 49 cultural WHS located in low-lying coastal areas of the Mediterranean, 37 are at risk from a 100-year flood and 42 from coastal erosion, already today. Until 2100, flood risk may increase by 50% and erosion risk by 13% across the region, with considerably higher increases at individual WHS. Our results provide a first-order assessment of where adaptation is most urgently needed and can support policymakers in steering local-scale research to devise suitable adaptation strategies for each WHS.

Using the LSMS-ISA Tanzania National Panel Survey by the World Bank, we study the relationship between rural household consumption growth and temperature shocks over the period 2008 – 2013. Temperature shocks have a negative and significant impact on household growth only if their initial consumption lies below a critical threshold. As such, temperature shocks slow income convergence among households. Agricultural yields and labour productivity are the main transmission channels. These findings support the Schelling Conjecture: economic development would allow poor farming households to cope with climate change, and closing the yield gap and modernizing agriculture is crucial for adaptation to the negative impacts of global warming.

Recently it has been hypothesized that climate change will affect total factor productivity growth. Given the importance of TFP for long-run economic growth, if true this would entail a substantial upward revision of current impact estimates. Using macro TFP data from a recently developed dataset in Penn World Tables, we test this hypothesis by directly examining the nature of the relationship between annual temperature shocks and TFP growth rates in the last decades. The results show a negative relationship only in poor countries. While statistically significant, the estimate upper bound is a reduction of TFP growth is less than 0.1%, i.e., climate change will decelerate but not reverse economic growth. This finding increases concerns over the distributional issues of future impacts, and restates the case for complementarity between climate policy and poverty reduction.

We explore the relationship between natural disasters and income inequality in Sri Lanka as the first study of this nature for the country. The analysis uses a unique panel data set constructed for the purpose of this paper. It contains district inequality measures based on household income reported in six waves of the Household Income and Expenditure Survey of Sri Lanka during the period between 1990 and 2013, data on disaster affected population and other economic and social indicators. Employing a panel fixed effects estimator, we find that contemporaneous natural disasters and their immediate lags significantly and substantially decrease inequality in per adult equivalent household income as measured by the Theil index. Findings are robust across various inequality metrics, sub-samples and alternative estimators such as Ordinary Least Squares and System GMM. However, natural disasters do not affect household expenditure inequality. Either households behave as if they have a permanent income or all households reduce their expenditure proportionately irrespective of their income level in responding to natural disasters. Natural disasters decrease non-seasonal agricultural and non-agricultural income inequality but increase seasonal agricultural income inequality. Income of richer households is mainly derived from non-agricultural sources such as manufacturing and business activities and non-seasonal agricultural activities. Poorer households have a higher share of agricultural income.

The potential impacts of sea level rise (SLR) due to climate change have been widely studied in the literature. However, the uncertainty and robustness of these estimates has seldom been explored. Here we assess the model input uncertainty regarding the wide effects of SLR on marine navigation from a global economic perspective. We systematically assess the robustness of computable general equilibrium (CGE) estimates to model’s inputs uncertainty. Monte Carlo (MC) and Gaussian quadrature (GQ) methods are used for conducting a Systematic sensitivity analysis (SSA). This design allows to both explore the sensitivity of the CGE model and to compare the MC and GQ methods. Results show that, regardless whether triangular or piecewise linear Probability distributions are used, the welfare losses are higher in the MC SSA than in the original deterministic simulation. This indicates that the CGE economic literature has potentially underestimated the total economic effects of SLR, thus stressing the necessity of SSA when simulating the general equilibrium effects of SLR. The uncertainty decomposition shows that land losses have a smaller effect compared to capital and seaport productivity losses. Capital losses seem to affect the developed regions GDP more than the productivity losses do. Moreover, we show the uncertainty decomposition of the MC results and discuss the convergence of the MC results for a decomposed version of the CGE model. This paper aims to provide standardised guidelines for stochastic simulation in the context of CGE modelling that could be useful for researchers in similar settings.

Using the LSMS-ISA Tanzania National Panel Survey by the World Bank, we study the relationship between rural household consumption growth and temperature shocks over the period 2008 – 2013. Temperature shocks have a negative and significant impact on household growth only if their initial consumption lies below a critical threshold. As such, temperature shocks slow income convergence among households. Agricultural yields and labour productivity are the main transmission channels. These findings support the Schelling Conjecture: economic development would allow poor farming households to cope with climate change, and closing the yield gap and modernizing agriculture is crucial for adaptation to the negative impacts of global warming.

We investigate the stability of International Environmental Agreements. The analysis of Chwe is extended by investigating the question how to find farsightedly stable coalitions. The myopic stability concept of d'Aspremont, Jacquemin, Gabszeweiz, and Weymark and the farsighted stability concept of Chwe are compared. Farsighted stability, direct and indirect domination are discussed. Considering of the direct domination, we check for the single-step stability by comparing the profits of every coalition member after one-step deviation has occurred, while considering the indirect domination (farsightedness) we check for the multistep stability by comparing the profits of every coalition member after a series of deviations have come to an end. On the contrary, myopic stability assumes that players look only one step ahead. The improvement of farsightedly and myopically stable coalitions to the environment quality and welfare are compared. Only the farsightedly stable coalition math formula improves the welfare and abatement by 20% and 79% in comparison to all three myopically stable coalitions together. Algorithms are developed, which can find all farsightedly stable coalitions structures.

We report the first ex post study of the economic impact of sea level rise. We apply two econometric approaches to estimate the past effects of sea level rise on the economy of the USA, viz. Barro type growth regressions adjusted for spatial patterns and a matching estimator. Unit of analysis is 3063 counties of the USA. We fit growth regressions for 13 time periods and we estimated numerous varieties and robustness tests for both growth regressions and matching estimator. Although there is some evidence that sea level rise has a positive effect on economic growth, in most specifications the estimated effects are insignificant. We therefore conclude that there is no stable, significant effect of sea level rise on economic growth. This finding contradicts previous ex ante studies.

We estimate the impact of natural disasters on financial development proxied by private credit. We employ a panel fixed effects estimator as our main estimation tool on a country level panel data set of natural disasters and other economic indicators covering 147 countries for the period from 1979 to 2011. We find that companies and households get deeper into debt after a natural disaster. This effect is stronger in poorer countries whilst the effect is weaker in countries where agriculture is more important. Accordingly, it appears that natural disasters significantly increase contemporaneous private per capita credit. This impact is mitigated by higher per capita income and further dampened by higher agriculture dependency in the economy. Our findings are robust to alternative estimators, specifications, and samples.

This paper analyzes the empirical relationship between carbon dioxide (CO²) emissions per-capita and economic growth in a panel of 20 Latin American and Caribbean countries over the period 1971-2011. This empirical relationship, known in the economic literature as the Environmental Kuznets Curve (EKC) hypothesis, suggests that the relationship between these variables, in the long run, follows an inverse U-shape, that is, from a certain level of per-capita income, an increased economic growth would be accompanied by improvements in environmental quality. Although this hypothesis has been studied since the 1990s, its empirical validity has recently been questioned on the basis of, among other things, the lack of diagnosis of the stationarity properties of the variables, and in a panel data context, the presence of cross-sectional dependence. Taking into account both criticisms, we use recent unit root tests and cointegration techniques that are robust to the presence of cross-sectional dependence. We find contradictory results depending on the assumption of cross-dependence. Under the assumption of cross-independence, the existence of an EKC with a realistic turning point is confirmed. However, this assumption is subsequently rejected, and because of the presence of cross-dependence in the panel, a long-run equilibrium relationship between the variables cannot be established, and we reject the existence of an EKC.

Climate change impacts can be especially large in cities1, 2. Several large cities are taking climate change into account in long-term strategies3, 4, for which it is important to have information on the costs and benefits of adaptation5. Studies on climate change impacts in cities mostly focus on a limited set of countries and risks, for example sea-level rise, health and water resources6. Most of these studies are qualitative, except for the costs of sea-level rise in cities7, 8. These impact estimates do not take into account that large cities will experience additional warming due to the urban heat island effect9, 10, that is, the change of local climate patterns caused by urbanization. Here we provide a quantitative assessment of the economic costs of the joint impacts of local and global climate change for all main cities around the world. Cost–benefit analyses are presented of urban heat island mitigation options, including green and cool roofs and cool pavements. It is shown that local actions can be a climate risk-reduction instrument. Furthermore, limiting the urban heat island through city adaptation plans can significantly amplify the benefits of international mitigation efforts.

The Fisher Ideal index, developed to measure price inflation, is applied to define a population-weighted temperature trend. This method has the advantages that the trend is representative for the population distribution throughout the sample but without conflating the trend in the population distribution and the trend in the temperature. I show that the trend in the global area-weighted average surface air temperature is different in key details from the population-weighted trend. I extend the index to include urbanization and the urban heat island effect. This substantially changes the trend again. I further extend the index to include international migration, but this has a minor impact on the trend.

Estimates of the global economic impacts of observed climate change during the 20th century obtained by applying five impact functions of different integrated assessment models (IAMs) are separated into their main natural and anthropogenic components. The estimates of the costs that can be attributed to natural variability factors and to the anthropogenic intervention with the climate system in general tend to show that: 1) during the first half of the century, the amplitude of the impacts associated with natural variability is considerably larger than that produced by anthropogenic factors and the effects of natural variability fluctuated between being negative and positive. These non-monotonic impacts are mostly determined by the low-frequency variability and the persistence of the climate system; 2) IAMs do not agree on the sign (nor on the magnitude) of the impacts of anthropogenic forcing but indicate that they steadily grew over the first part of the century, rapidly accelerated since the mid 1970's, and decelerated during the first decade of the 21st century. This deceleration is accentuated by the existence of interaction effects between natural variability and natural and anthropogenic forcing. The economic impacts of anthropogenic forcing range in the tenths of percentage of the world GDP by the end of the 20th century; 3) the impacts of natural forcing are about one order of magnitude lower than those associated with anthropogenic forcing and are dominated by the solar forcing; 4) the interaction effects between natural and anthropogenic factors can importantly modulate how impacts actually occur, at least for moderate increases in external forcing. Human activities became dominant drivers of the estimated economic impacts at the end of the 20th century, producing larger impacts than those of low-frequency natural variability. Some of the uses and limitations of IAMs are discussed.

First-best climate policy is a uniform carbon tax which gradually rises over time. Civil servants have complicated climate policy to expand bureaucracies, politicians to create rents. Environmentalists have exaggerated climate change to gain influence, other activists have joined the climate bandwagon. Opponents to climate policy have attacked the weaknesses in climate research. The climate debate is convoluted and polarized as a result, and climate policy complex. Climate policy should become easier and more rational as the Paris Agreement has shifted climate policy back towards national governments. Changing political priorities, austerity, and a maturing bureaucracy should lead to a more constructive climate debate.

The effect of learning on climate policy is not straightforward when climate policy is concerned. It depends not only on the ways that climate feedbacks, preferences, and economic impacts are considered, but also on the ways that uncertainty and learning are introduced. Deep (or fat-tailed) uncertainty does matter for the optimal climate policy in that it requires more stringent efforts to reduce carbon emissions. However, learning may reveal thin-tailed uncertainty, weakening the case for emission abatement: learning reduces the stringency of the optimal abatement efforts relative to the no learning case even when we account for deep uncertainty. In order to investigate this hypothesis, we construct an endogenous (Bayesian) learning model with fat-tailed uncertainty on climate change and solve the model with stochastic dynamic programming. In our model a decision maker updates her belief on the total feedback factors through temperature observations each period and takes a course of action (carbon reductions) based on her belief. With various scenarios, we find that the uncertainty is partially resolved over time, although the rate of learning is relatively slow, and this materially affects the optimal decision: the decision maker with a possibility of learning lowers the effort to reduce carbon emissions relative to the no learning case. This is because the decision maker fully utilizes the information revealed to reduce uncertainty, and thus she can make a decision contingent on the updated information. In addition, with incorrect belief scenarios, we find 2 that learning enables the economic agent to have less regrets (in economic terms, sunk benefits or sunk costs) for her past decisions after the true value of the uncertain variable is revealed to be different from the initial belief.

Computable general equilibrium (CGE) models offer a method of studying the role of water resources and water scarcity in the context of international trade. This chapter reviews the literature on water-related CGE modeling by providing a survey that focuses on the implications of different modeling techniques of water resource. We differentiate between models that explicitly model water as a factor of production and those that model water as an implicit factor of production. Within the category of studies that model water explicitly we further differentiate between models that assume a high degree of substitution between water and primary factors and those that assume a low degree of substitution. We also differentiate between regional and global models. Further, we provide information on the type of analysis the model was used for.

Past climatic changes were caused by a slowdown of the thermohaline circulation. We use results from experiments with three climate models to show that the expected cooling due to a slowdown of the thermohaline circulation is less in magnitude than the expected warming due to increasing greenhouse gas concentrations. The integrated assessment model FUND and a meta-analysis of climate impacts are used to evaluate the change in human welfare. We find modest but by and large positive effects on human welfare since a slowdown of the thermohaline circulation implies decelerated warming.

Cook et al's highly influential consensus study (2013 Environ. Res. Lett. 8 024024) finds different results than previous studies in the consensus literature. It omits tests for systematic differences between raters. Many abstracts are unaccounted for. The paper does not discuss the procedures used to ensure independence between the raters, to ensure that raters did not use additional information, and to ensure that later ratings were not influenced by earlier results. Clarifying these issues would further strengthen the paper, and establish it as our best estimate of the consensus.

Ackerman and Munitz (2016) offer a critique of estimates of the economic impact of climate change and the social cost of carbon in general, and the FUND model in particular. I am grateful for the opportunity to reply. In this response, I note that (i) their concerns are not new; (ii) they highlight strengths of FUND rather than its weaknesses; and (iii) they revisit their old mistakes. I conclude with a few improvements to FUND prompted by Messrs Ackerman and Munitz.

There have been dramatic advances in understanding the physical science of climate change, facilitated by substantial and reliable research support. The social value of these advances depends on understanding their implications for society, an arena where research support has been more modest and research progress slower. Some advances have been made in understanding and formalizing climate-economy linkages, but knowledge gaps remain [e.g., as discussed in (1, 2)]. We outline three areas where we believe research progress on climate economics is both sorely needed, in light of policy relevance, and possible within the next few years given appropriate funding: (i) refining the social cost of carbon (SCC), (ii) improving understanding of the consequences of particular policies, and (iii) better understanding of the economic impacts and policy choices in developing economies.

Most functions of economic impact assume that climate change is smooth. We here propose impact functions that have stochastic climate change as an input. These functions are identical in shape and have similar parameters as do deterministic impact functions. The mean stochastic impacts are thus similar to deterministic impacts. Welfare effects are larger, and the stochasticity premium is larger than the risk premium. Results suggest that stochasticity is more important for past impacts than for future impacts. This outcome is partly caused by an underestimation of natural variability in the 21st century climate projections.

This paper investigates the role of emissions control in welfare maximization under fat-tailed risk about climate change. We provide a classification of fat tails and discuss the effect of fat-tailed risk on climate policy. One of the main findings is that emissions control may prevent the “strong” tail-effect from arising, at least under some conditions such as bounded temperature increases, low risk aversion, low damage costs, and bounded utility function. More specifically, the fat-tailed risk with respect to a climate parameter does not necessarily lead to an unbounded carbon tax. In this case, the basic principle of cost-benefit analysis maintains its applicability.

Warming of the climate system and its impacts on biophysical and human systems have been widely documented. The frequency and intensity of extreme weather events have also changed, but the observed increases in natural disaster losses are often thought to result solely from societal change, such as increases in exposure and vulnerability. Here we analyse the economic losses from tropical cyclones in the United States, using a regression-based approach instead of a standard normalization procedure to changes in exposure and vulnerability, to minimize the chance of introducing a spurious trend. Unlike previous studies, we use statistical models to estimate the contributions of socioeconomic factors to the observed trend in losses and we account for non-normal and nonlinear characteristics of loss data. We identify an upward trend in economic losses between 1900 and 2005 that cannot be explained by commonly used socioeconomic variables. Based on records of geophysical data, we identify an upward trend in both the number and intensity of hurricanes in the North Atlantic basin as well as in the number of loss-generating tropical cyclone records in the United States that is consistent with the smoothed global average rise in surface air temperature. We estimate that, in 2005, US$2 to US$14 billion of the recorded annual losses could be attributable to climate change, 2 to 12% of that year’s normalized losses. We suggest that damages from tropical cyclones cannot be dismissed when evaluating the current and future costs of climate change and the expected benefits of mitigation and adaptation strategies.

Integrated assessment models (IAMs) typically ignore the impact climate change could have on economic growth. The damage functions of these models assume that climate change impacts have no persistence at all, affecting only the period when they occur. Persistence of shocks is a stylized fact of macroeconomic time series and it provides a mechanism that could justify larger losses from climate change than previously estimated. Given that the degree of persistence of climate impacts is unknown, we analyze the persistence of generic shocks in observed GDP series for different world regions and compare it to that of the leading IAMs. Under the working hypothesis of interpreting the direct impact of climate change as such shocks, the implications for growth are investigated for two RCP scenarios. The way of introducing climate shocks to GDP in most IAMs can be interpreted as assuming an autonomous, costless, large and effective reactive adaptation capacity.

One of the climate change scenarios that have been developed for the Netherlands predicts hotter and drier summers and a substantial drop in river discharge. This might lead to water scarcity with detrimental economic and environmental effects. Among the possible adaptation responses to climate change-induced water scarcity, the re-allocation of water resources among competing uses should also be considered. In this paper, we extend and apply a computable general equilibrium (CGE) model to assess the potential of water markets (water allocation according to its shadow price) to guide the allocation of scarce water across agriculture, manufacturing, and public water supply. We develop four scenarios in which the scope of water markets is increased from industry-specific to economy-wide. The results show that the agricultural sector bears nearly all of the losses from a new water-scarce climate, while the manufacturing sectors are able to mitigate their losses to a large extent by technical measures. Extending the scope of water markets unambiguously increases economic output and results in a re-allocation of water to the manufacturing sector from the agricultural sector and from public water services. If, perhaps for political reasons, public water services are excluded from water trading, water is re-allocated from agriculture to manufacturing. Depending on which sectors are included, the construction of a water market can have negative or positive effects on a sector’s output, and although the implementation of water markets may be positive for overall economic output and can hence assist adaptation, the effect on vulnerable or societally sensitive economic sectors, such as public water, should be taken into account when implementing such a market.

We apply four alternative decision criteria, two old ones and two new, to the question of the appropriate level of greenhouse gas emission reduction. In all cases, we consider a uniform carbon tax that is applied to all emissions from all sectors and all countries; and that increases over time with the discount rate. For a one per cent pure rate of the time preference and a rate of risk aversion of one, the tax that maximises expected net present welfare equals $120/tC in 2010. However, we also find evidence that the uncertainty about welfare may well have fat tails so that the sample mean exists only by virtue of the finite number of runs in our Monte Carlo analysis. This is consistent with Weitzman’s Dismal Theorem. We therefore consider minimax regret as a decision criterion. As regret is defined on the positive real line, we in fact consider large percentiles instead of the ill-defined maximum. Depending on the percentile used, the recommended tax lies between $100 and $170/tC. Regret is a measure of the slope of the welfare function, while we are in fact concerned about the level of welfare. We therefore minimise the tail risk, defined as the expected welfare below a percentile of the probability density function without climate policy. Depending on the percentile used, the recommended tax lies between $20 and $330/tC. We also minimise the fatness of the tails, as measured by the p-value of the test of the null hypothesis that recursive mean welfare is non-stationary in the number of Monte Carlo runs. We cannot reject the null hypothesis of non-stationarity at the 5 % confidence level, but come closest for an initial tax of $50/tC. All four alternative decision criteria rapidly improve as modest taxes are introduced, but gradually deteriorate if the tax is too high. That implies that the appropriate tax is an interior solution. In stark contrast to some of the interpretations of the Dismal Theorem, we find that fat tails by no means justify arbitrarily large carbon taxes.

I estimate the cost of meeting the EU 2030 targets for greenhouse gas emission reduction, using statistical emulators of ten alternative models. Assuming a first-best policy implementation, I find that total and marginal costs are modest. The statistical emulators allow me to compute the risk premiums, which are small, because the EU is rich and the policy impact is small. The ensemble of ten models allows me to compute the ambiguity premium, which is small for the same reason. I construct a counterfactual estimate of recent emissions without the climate policy and use that to test the predictive skill of the ten models. The models that show the lowest cost of emission reduction also have the lowest skill for Europe in recent times.

Abstract Bootstrap and smoothed bootstrap methods are used to estimate the uncertainty about the total impact of climate change, and to assess the performance of commonly used impact functions. Kernel regression is extended to include restrictions on the functional form. Impact functions do not describe the primary estimates of the economic impacts very well, and monotonic functions do particularly badly. The impacts of climate change do not significantly deviate from zero until 2.5–3.5 ◦C warming. The uncertainty is large, and so is the risk premium. The ambiguity premium is small, however. The certainty equivalent impact is a negative 1.5 % of income for 2.5 ◦C, rising to 15 % (50 %) for 5.0 ◦C for a rate of risk aversion of 1 (2).

The authors use FUND 3.9 to estimate the social cost of four greenhouse gases—carbon dioxide, methane, nitrous oxide, and sulphur hexafluoride—with sensitivity tests for carbon dioxide fertilization, terrestrial feedbacks, climate sensitivity, discounting, equity weighting, and socioeconomic and emissions assumptions. They also estimate the global damage potential for each gas—the ratio of the social cost of the non-carbon dioxide greenhouse gas to the social cost of carbon dioxide. For all gases, they find the social costs and damage potentials sensitive to alternative assumptions. The global damage potentials are compared to global warming potentials (GWPs), a key metric used to compare gases. The authors find that global damage potentials are higher than GWPs in nearly all sensitivities. This finding suggests that previous papers using GWPs may be underestimating the relative importance of reducing noncarbon dioxide greenhouse gas emissions from a climate damage perspective. Of particular interest is the sensitivity of results to carbon dioxide fertilization, which notably reduces the social cost of carbon dioxide, but only has a small effect on the other gases. As a result, the global damage potentials for methane and nitrous oxide are much higher with carbon dioxide fertilization included, and higher than many previous estimates.

A recent Climatic Change review article reports a remarkable convergence of scientific evidence for a link between climatic events and violent intergroup conflict, thus departing markedly from other contemporary assessments of the empirical literature. This commentary revisits the review in order to understand the discrepancy. We believe the origins of the disagreement can be traced back to the review article’s underlying quantitative meta-analysis, which suffers from shortcomings with respect to sample selection and analytical coherence. A modified assessment that addresses some of these problems suggests that scientific research on climate and conflict to date has produced mixed and inconclusive results.

A claim has been that 97% of the scientific literature endorses anthropogenic climate change (Cook et al., 2013. Environ. Res. Lett. 8, 024024). This claim, frequently repeated in debates about climate policy, does not stand. A trend in composition is mistaken for a trend in endorsement. Reported results are inconsistent and biased. The sample is not representative and contains many irrelevant papers. Overall, data quality is low. Cook׳s validation test shows that the data are invalid. Data disclosure is incomplete so that key results cannot be reproduced or tested.

Human societies are usually thought to adapt culturally to mean climatic temperature. Here we alternatively propose that cultural adaptations are fine-tuned, using monetary means as tools, to harsh deviations from optimally livable winter and summer temperatures around 22°C. We test for the first time the interactive impacts of cold demands, heat demands, precipitation, and income on the autocracy of central government. Eight regression analyses across 173 nations, with R2 ranging from 0.29 to 0.55, show that political cultures vary from maximally autocratic in poor countries threatened by demandingly cold and dry climates, to maximally democratic in rich countries challenged by demandingly cold and dry climates. Moreover, demandingly hot and dry climates appear to promote autocracy everywhere, irrespective of the country’s level of income. The best documented rival explanations, including human-to-human transmitted diseases, ethnic diversity, and low average intelligence of the population, could not account for the findings. This kind of evidence may lead climate-culture scholars to move away from climatic determinism toward climato-economic theory building on the origins of cultures.

We apply four alternative decision criteria, two old ones and two new, to the question of the appropriate level of greenhouse gas emission reduction. In all cases, we consider a uniform carbon tax that is applied to all emissions from all sectors and all countries; and that increases over time with the discount rate. For a one per cent pure rate of the time preference and a rate of risk aversion of one, the tax that maximises expected net present welfare equals $120/tC in 2010. However, we also find evidence that the uncertainty about welfare may well have fat tails so that the sample mean exists only by virtue of the finite number of runs in our Monte Carlo analysis. This is consistent with Weitzman’s Dismal Theorem. We therefore consider minimax regret as a decision criterion. As regret is defined on the positive real line, we in fact consider large percentiles instead of the ill-defined maximum. Depending on the percentile used, the recommended tax lies between $100 and $170/tC. Regret is a measure of the slope of the welfare function, while we are in fact concerned about the level of welfare. We therefore minimise the tail risk, defined as the expected welfare below a percentile of the probability density function without climate policy. Depending on the percentile used, the recommended tax lies between $20 and $330/tC. We also minimise the fatness of the tails, as measured by the p-value of the test of the null hypothesis that recursive mean welfare is non-stationary in the number of Monte Carlo runs. We cannot reject the null hypothesis of non-stationarity at the 5 % confidence level, but come closest for an initial tax of $50/tC. All four alternative decision criteria rapidly improve as modest taxes are introduced, but gradually deteriorate if the tax is too high. That implies that the appropriate tax is an interior solution. In stark contrast to some of the interpretations of the Dismal Theorem, we find that fat tails by no means justify arbitrarily large carbon taxes.

This unique and erudite text on the economics of climate change and climate policy can be used at three different levels – advanced undergraduate, post-graduate and doctoral. It comprehensively covers the critical issues and clearly identifies the specific sections each level of reader should explore. Topics include the costs and benefits of adaptation and mitigation, discounting, uncertainty, policy instruments, and international agreements. Lectures can be combined with exercises, guided reading, or the building and application of an integrated assessment model. The book is accompanied by a website with background material, data, opinion pieces and videos. Although primarily intended for use in the classroom, anyone with an interest in climate policy can use this text as a reference.

A survey of the economic impact of climate change and the marginal damage costs shows that carbon dioxide emissions are a negative externality. The estimated Pigou tax and its growth rate are too low to justify the climate policy targets set by political leaders. A lower discount rate or greater concern for the global distribution of income would justify more stringent climate policy, but would imply an overhaul of other public policies. Catastrophic risk justifies more stringent climate policy, but only to a limited extent.

This paper applies the Ijiri–Simon test for systematic deviations from Gibrat's law to citation numbers of economists. It is found that often-cited researchers attract new citation numbers that are disproportionate to the quality of their work. It is also found that this Matthew effect is stronger for economists who started their academic career earlier.

This paper uses two models to examine the direct and indirect costs of sea-level rise for Europe for a range of sea-level rise scenarios for the 2020s and 2080s: (1) the DIVA model to estimate the physical impacts of sea-level rise and the direct economic cost, including adaptation, and (2) the GTAP-EF model to assess the indirect economic implications. Without adaptation, impacts are quite significant with a large land loss and increase in the incidence of coastal flooding. By the end of the century Malta has the largest relative land loss at 12% of its total surface area, followed by Greece at 3.5% land loss. Economic losses are however larger in Poland and Germany (483 and 391 million, respectively). Coastal protection is very effective in reducing these impacts and optimally undertaken leads to protection levels that are higher than 85% in the majority of European states. While the direct economic impact of sea-level rise is always negative, the final impact on countries’ economic performances estimated with the GTAP-EF model may be positive or negative. This is because factor substitution, international trade, and changes in investment patterns interact with possible positive implications. The policy insights are (1) while sea-level rise has negative and huge direct economic effects, overall effects on GDP are quite small (max −0.046% in Poland); (2) the impact of sea-level rise is not confined to the coastal zone and sea-level rise indirectly affects landlocked countries as well (Austria for instance loses −0.003% of its GDP); and (3) adaptation is crucial to keep the negative impacts of sea-level rise at an acceptable level.

This paper investigates the economic implications of disruptions of one to ninety days to the supply of natural gas in Ireland. We assess the impact of a hypothetical gas supply disruption in both winter and summer in 2008 (with observed market characteristics) and in 2020 (with projected market characteristics). The cost of a natural gas outage includes the cost of natural gas being unavailable for heating and other purposes in the industrial and commercial sectors, lost consumer surplus in the residential sector, the cost of lost electricity in all sectors and lost VAT on the sale of gas and electricity. Ireland generates much of its electricity from natural gas and the loss of this electricity accounts for the majority of the cost of a natural gas outage. Losing gas-fired electricity would cost 0.1–1.0 billion euro per day, depending on the time to the week, the time of year and rationing. Industry should be rationed before households to minimise economic losses, but current emergency protocols do the opposite. If gas-fired electricity is unavailable for three months, the economic loss could be up to 80 billion euro, about half of Gross Domestic Product. Losing gas for heating too would add up to approximately 8 billion euro in economic losses. We also discuss some options to increase Ireland’s security of supply, and find that the cost is a small fraction of the avoided maximum damage.

We assess the subsidy for the installation of biomass boilers and wood gasification boilers under the Greener Homes Scheme in Ireland. We find that the (implicit) subsidy per tonne of carbon dioxide avoided varies hugely across households. The current policy costs 17% too much for the emissions avoided, or avoids 17% too little for the money spent. The subsidy reduces net social gain (including environmental benefits but excluding producer surplus) by 42%.

This paper aims to determine emissions polluted directly and indirectly by an average person, for each household type, across a wide range of emissions. There are five household type categories: location, income decile, household composition, size and number of disabled residents. Ireland's Sustainable Development Model (ISus) is used which allows the analysis of direct and indirect sources of pollution per household as the model is based on an input–output methodology. Four sets of results are presented: first for greenhouse gas emissions, second for air pollutants, third for persistent organic pollutants and lastly for metals. An analysis section shows how the picture changes when one controls for the size and income of households. All results analysed are for the year 2006. Most greenhouse gas and metal emissions are polluted via indirect means, although direct sources of emissions play a role for CO2, SO2 and CO. The results suggest that the richest decile is the biggest emitter and poorer and larger households are seen to emit the least per person. It is also shown that household income has a stronger relationship with pollution than household size per person.

We present a mixed-integer, linear programming model for determining optimal interconnection for a given level of renewable generation using a cost minimisation approach. Optimal interconnection and capacity investment decisions are determined under various targets for renewable penetration. The model is applied to a test system for eight regions in Northern Europe. It is found that considerations on the supply side dominate demand side considerations when determining optimal interconnection investment: interconnection is found to decrease generation capacity investment and total costs only when there is a target for renewable generation. Higher wind integration costs see a concentration of wind in high-wind regions with interconnection to other regions.

Ocean acidification is increasingly recognized as a major global problem. Yet economic assessments of its effects are currently almost absent. Unlike most other marine organisms, mollusks, which have significant commercial value worldwide, have relatively solid scientific evidence of biological impact of acidification and allow us to make such an economic evaluation. By performing a partial-equilibrium analysis, we estimate global and regional economic costs of production loss of mollusks due to ocean acidification. Our results show that the costs for the world as a whole could be over 100 billion USD with an assumption of increasing demand of mollusks with expected income growths combined with a business-as-usual emission trend towards the year 2100. The major determinants of cost levels are the impacts on the Chinese production, which is dominant in the world, and the expected demand increase of mollusks in today’s developing countries, which include China, in accordance with their future income rise. Our results have direct implications for climate policy. Because the ocean acidifies faster than the atmosphere warms, the acidification effects on mollusks would raise the social cost of carbon more strongly than the estimated damage adds to the damage costs of climate change.

This paper uses a vote-counting procedure to estimate the probability density function of the total economic impact as a parabolic function of global warming. There is a wide range of uncertainty about the impact of climate change up to 3°C, and the information becomes progressively more diffuse beyond that. Warming greater than 3°C most likely has net negative impacts, and warming greater than 7°C may lead to a total welfare loss. The expected value of the social cost of carbon is about $29/tC in 2015 and rises at roughly 2% per year.

The European Commission did not publish a cost–benefit analysis for its 2020 climate package. This paper fills that gap, comparing the marginal costs and benefits of greenhouse gas emission reduction. The uncertainty about the marginal costs of climate change is large and skewed, and estimates partly reflect ethical choices (e.g., the discount rate). The 2010 carbon price in the EU Emissions Trading System can readily be justified by a cost–benefit analysis. Emission reduction is not expensive provided that policy is well-designed, a condition not met by planned EU policy. It is probably twice as expensive as needed, costing one in ten years of economic growth. The EU targets for 2020 are unlikely to meet the benefit–cost test. For a standard discount rate (3% pure rate of time preference), the benefit–cost ratio is rather poor (1/30)—so that benefits need to be very much higher, or costs very much lower than typically assumed to justify the 2020 targets. Only a very low discount rate (0% PRTP) would justify the 20% emission reduction target for 2020.

A cap is imposed on the carbon tax rate if the total tax revenue is not allowed to increase. Using recent data on the carbon-intensity of the economy and the overall tax take, I show that this cap constrains almost any climate policy in at least some countries. A larger number of countries, emitting a substantial share of global carbon dioxide, cannot fully participate if the carbon tax (or equivalent alternative regulation) is high enough to meet the 2 °C target. For that target, the carbon tax revenue in 2020 is greater than 10 % of total tax revenue in every country.

Multi-gas approaches to climate change policies require a metric establishing 'equivalences' among emissions of various species. Climate scientists and economists have proposed four kinds of such metrics and debated their relative merits. We present a unifying framework that clarifies the relationships among them. We show, as have previous authors, that the global warming potential (GWP), used in international law to compare emissions of greenhouse gases, is a special case of the global damage potential (GDP), assuming (1) a finite time horizon, (2) a zero discount rate, (3) constant atmospheric concentrations, and (4) impacts that are proportional to radiative forcing. Both the GWP and GDP follow naturally from a cost–benefit framing of the climate change issue. We show that the global temperature change potential (GTP) is a special case of the global cost potential (GCP), assuming a (slight) fall in the global temperature after the target is reached. We show how the four metrics should be generalized if there are intertemporal spillovers in abatement costs, distinguishing between private (e.g., capital stock turnover) and public (e.g., induced technological change) spillovers. Both the GTP and GCP follow naturally from a cost-effectiveness framing of the climate change issue. We also argue that if (1) damages are zero below a threshold and (2) infinitely large above a threshold, then cost-effectiveness analysis and cost–benefit analysis lead to identical results. Therefore, the GCP is a special case of the GDP. The UN Framework Convention on Climate Change uses the GWP, a simplified cost–benefit concept. The UNFCCC is framed around the ultimate goal of stabilizing greenhouse gas concentrations. Once a stabilization target has been agreed under the convention, implementation is clearly a cost-effectiveness problem. It would therefore be more consistent to use the GCP or its simplification, the GTP.

We report the results of an uncertainty decomposition analysis of the social cost of carbon as estimated by FUND, a model that has a more detailed representation of the economic impact of climate change than any other model. Some of the parameters particularly influence impacts in the short run whereas other parameters are important in the long run. Some parameters are influential in some regions only. Some parameters are known reasonably well, but others are not. Ethical values, such as the pure rate of time preference and the rate of risk aversion, therefore affect not only the social cost of carbon, but also the importance of the parameters that determine its value. Some parameters, however, are consistently important: cooling energy demand, migration, climate sensitivity, and agriculture. The last two are subject to a large research effort, but the first two are not.

In this paper we use a subsystem input-output decomposition analysis to examine the drivers of
greenhouse gas emissions in the Republic of Ireland and in Northern Ireland. We use a bi-regional input-output
analysis to look at how greenhouse gases in one region can be emitted as a result of demand in an exporting
region. Looking at emissions generated throughout the island of Ireland, we find that emissions driven by
demand in Northern Ireland are larger than those it generates, and vice-versa for the Republic of Ireland. We
then use the input-output tables to simulate the effect of imposing a €15/tonne carbon tax in the Republic of
Ireland. We find that this causes a decrease in final demand in the Republic of Ireland, and a decrease in output
in both the Republic of Ireland and in Northern Ireland; the decrease is greater in the Republic as the
domestically produced share of inputs is much larger than the imported share in all sectors.

A Bentham–Rawls welfare function is the weighted sum of the net present welfare (Bentham) and the welfare of the worst-off generation (Rawls). If utility is non-decreasing over time, optimal climate policy is more stringent in the near-term under the Bentham criterion than under the Bentham–Rawls criterion. If utility is decreasing, Bentham–Rawls abatement is higher. If there is a chance of decreasing utility, Bentham–Rawls optimal climate policy is probably less stringent than Bentham policy.

The national version of FUND3.6 is used to backcast the impacts of climate change to the 20th century and extrapolate to the 21st century. Carbon dioxide fertilization of crops and reduced energy demand for heating are the main positive impacts. Climate change had a negative effect on water resources and, in most years, human health. Most countries benefitted from climate change until 1980, but after that the trend is negative for poor countries and positive for rich countries. The global average impact was positive in the 20th century. In the 21st century, impacts turn negative in most countries, rich and poor. Energy demand, water resources, biodiversity and sea level rise are the main negative impacts; the impacts of climate change on human health and agriculture remain positive until 2100.

The transition from autocracy to democracy may lead a country to break-up. The break-ups of the USSR and Yugoslavia led to sharp falls in the level of emissions (while pre- and post-crisis trends are similar). If something like that would happen in China, an event with an unknown but small probability, projected emissions would fall by 50 % or more. The effect of a break-up on emissions in 2050 is larger than the difference between the SRES scenarios.

Performance measures of individual scholars tend to ignore the context. I introduce contextualised metrics: cardinal and ordinal pseudo-Shapley values that measure a scholar’s contribution to (perhaps power over) her own school and her market value to other schools should she change job. I illustrate the proposed measures with business scholars and business schools in Ireland. Although conceptually superior, the power indicators imply a ranking of scholars within a school that is identical to the corresponding conventional performance measures. The market value indicators imply an identical ranking within schools and a very similar ranking between schools. The ordinal indices further contextualise performance measures and thus deviate further from the corresponding conventional indicators. As the ordinal measures are discontinuous by construction, a natural classification of scholars emerges. Averaged over schools, the market values offer little extra information over the corresponding production and impact measures. The ordinal power measure indicates the robustness or fragility of an institution’s place in the rank order. It is only weakly correlated with the concentration of publications and citations.

This article presents a model of development, civil war and climate change. There are multiple interactions. Economic growth reduces the probability of civil war and the vulnerability to climate change. Climate change increases the probability of civil war. The impacts of climate change, civil war and civil war in the neighbouring countries reduce economic growth. The model has two potential poverty traps – one is climate-change-induced and one is civil-war-induced – and the two poverty traps may reinforce one another. The model is calibrated to sub-Saharan Africa and a double Monte Carlo analysis is conducted in order to account for both parameter uncertainty and stochasticity. Although the IPCC Special Report on Emission Scenarios (SRES) is used as the baseline, thus assuming rapid economic growth in Africa and convergence of African living standards to the rest of the world, the impacts of civil war and climate change (ignored in SRES) are sufficiently strong to keep a number of countries in Africa in deep poverty with a high probability.

We use a hedonic house price model to estimate the value of transport networks to homeowners in the Dublin area. Using a data set of house sales and data on rail lines in Dublin, we assess the values assigned to different transport links by homeowners. We find that the value attributed to transport depends on its distance from a property and is affected by the availability of alternative transport options. There are differences in the values assigned to recently constructed tramlines compared to the traditional rapid transit train stations. The study also takes into account house characteristics and other environmental amenities.

The relationship global mean temperature - atmospheric concentration of carbon dioxide is modelled by means of time series analysis as it is used in a non-experimental statistical context. The goal is to test the hypothesis that the global mean surface air temperature rises due to the rising atmospheric concentrations of greenhouse gases. Starting with some naive time series models we show that the enhanced greenhouse effect is plausible. Taking the long-term natural variability of the climate into account casts doubt on this claim but properly quantifying the size of the variability restores the significance of the greenhouse parameter. Although statistics cannot constitute a proof of the hypothesis, the results of this paper are strong enough to conclude that at least part of the recent high temperatures is, with high probability, caused by the increase in the atmospheric concentration of carbon dioxide.

The analysis of part I (Tol and de Vos, 1993) is supplemented, updated and refined, and the resolution bound of simple statistical analysis is tentatively explored. The main conclusion of part I, the hypothesis that the anthropogenically enhanced greenhouse effect is not responsible for the observed global warming during the last century is rejected with a 99% confidence, is reconfirmed for the updated sample period 1870-1991. The slight decrease in the global mean temperature between 1940 and 1975 is attributed to the influence of El Nino and the volcanic activity. The influence of sunspots, or the length of the solar cycle, is found to be small and unlikely to have caused the observed global temperature rise. The analysis of a number of alternative records lowers the significance of the influence of the enhanced greenhouse effect to 95%. Winter temperatures rise fastest, summer temperatures slowest; this is more profound on the northern than at the southern hemisphere. The difference is not significant; it could be due to the influence of anthropogenic aerosols. The analysis of monthly temperatures confirms the conclusions above, and shows that the models used here are close to being too simple to be used at this resolution.

Economic cost-benefit analysis of the costs of greenhouse gas emission abatement and climate change often points towards limited abatement. This note elucidates one reason why this result is obtained: the way in which the intangible damages are treated and the utility function is specified. On the basis of the DICE model, it is shown that by putting the intangible damages directly into the utility function, and by assuming them to grow with per capita income, the optimal reduction increases, and in the second case more than triples, compared to Nordhaus's original results.

The project Socio-economic aspects of the greenhouse effect: Climate fund studies the impact of international capital transfers on the efficiency and efficacy of greenhouse gas emission reduction. The absolute costs of emission abatement is substantially lower in less developed countries. The associated reduction of the damage due to conventional air pollution is higher in the richer countries in both absolute and relative terms. The costs of climatic change are relatively higher (but absolute lower) in the developing countries. Prime impacts are on agriculture (in the developing world) and human health (highly valued in the developed world). Costs of emission reduction and climatic change are joined in a nine region, quasi-Ramsey, integrated climate-economy model, called FUND, The first calculations with this model show that the (hardly known) dynamics of climate change and the great uncertainties play a critical role, that free riding behaviour need not be as prominent a problem as is generally believed, and that international capital transfers do not seem to substantially influence the optimal emission control, as the regions most interested in climate change do not have much capital to transfer. Negotiated emission caps are likely to alter this conclusion.

This paper surveys the literature on the economic impact of climate change. Different methods have been used to estimate the impact of climate change on human welfare. Studies agree that there are positive and negative impacts. In the short term, positive impacts may dominate, but these are largely sunk. In the longer term, there are net negative impacts. Poorer people tend to be more vulnerable to climate change. There is a trade-off between development policy and climate policy. Estimated aggregate impacts are not very large, but they are uncertain and incomplete. Estimates of the marginal impacts suggest that greenhouse gas emissions should be taxed, and that the emission reduction targets announced by politicians are probably too ambitious.

I review the literature on the economic impacts of climate change, an externality that is unprecedentedly large, complex, and uncertain. Only 14 estimates of the total damage cost of climate change have been published, a research effort that is in sharp contrast to the urgency of the public debate and the proposed expenditure on greenhouse gas emission reduction. These estimates show that climate change initially improves economic welfare. However, these benefits are sunk. Impacts would be predominantly negative later in the century. Global average impacts would be comparable to the welfare loss of a few percent of income, but substantially higher in poor countries. Still, the impact of climate change over a century is comparable to economic growth over a few years. There are over 200 estimates of the marginal damage cost of carbon dioxide emissions. The uncertainty about the social cost of carbon is large and right-skewed. For a standard discount rate, the expected value is $50/tC, which is much lower than the price of carbon in the European Union but much higher than the price of carbon elsewhere. Current estimates of the damage costs of climate change are incomplete, with positive and negative biases. Most important among the missing impacts are the indirect effects of climate change on economic development; large-scale biodiversity loss; low-probability, high-impact scenarios; the impact of climate change on violent conflict; and the impacts of climate change beyond 2100. From a welfare perspective, the impact of climate change is problematic because population is endogenous, and because policy analyses should separate impatience, risk aversion, and inequity aversion between and within countries.

Estimates of the marginal damage costs of carbon dioxide emissions require the aggregation of monetised impacts of climate change over people with different incomes and in different jurisdictions. Implicitly or explicitly, such estimates assume a social welfare function and hence a particular attitude towards equity and justice. We show that previous approaches to equity weighting are inappropriate from a national decision maker's point of view, because domestic impacts are not valued at domestic values. We propose four alternatives (sovereignty, altruism, good neighbour, and compensation) with different views on concern for and liability towards foreigners. The four alternatives imply radically different estimates of the social cost of carbon and hence the optimal intensity of climate policy.

Joint implementation is a hotly debated issue in the context of the Framework Convention on Climate Change (FCCC). The main argument for joint implementation is that, since it does not matter where greenhouse gas emissions are reduced (as these gases mix uniformly in the atmosphere), it is better to do it where abatement is cheapest. Many objections to joint implementation exist. Here we add one that argues against the uniform mixing property. Although in the long run the global climate is insensitive to the place where abatement is undertaken, in the short run the regional climate changes with the induced changes in the albedo. Indeed, reduction of the atmospheric load of sulphate aerosols and albedo changes associated with land cover change may well lead to accelerated warming in the region of abatement. This is undesirable as the rate of climatic change is a major determinant of the damage done. Hence, the discussion on joint implementation is further complicated.

Climate change is unique among the consequences of fossil fuel burning in its far reaching impact, both spatially and temporally. Earlier studies estimate the aggregated monetized damage due to climate change at 1.5 to 2.0% of world GDP (for 2 × CO2); the OECD would lose 1.0 to 1.5% of GDP; the developing countries 2.0 to 9.0%, according to these estimates. These figures are not comprehensive and highly uncertain. Newer studies increasingly emphasize adaptation, variability, extreme events, other (non-climate change) stress factors and the need for integrated assessment of damages. As a result, differences in impacts between regions and sectors have increased, the market impacts in developed countries tended to fall, and non-market impacts have become increasingly important. Marginal damages are more interesting from a policy point of view. Earlier estimates range from about US$5 to US$125 per tonne of carbon, with most estimates at the lower end of this range. These figures are based on polynomial functions in the level of climate change, but the rate of change may be equally important, as are the speed of adaptation, restoration and value adjustment. Furthermore, future vulnerability to climate change will be different from current vulnerability. On the whole, the market impacts fall (relatively) with economic growth while the non-market impacts rise (relatively) with growth.

Climate change results in an alteration of spatial and temporal patterns of climate hazards. The trend in weather related disaster seems upward. Various socio-economic sectors are affected by these changes, e.g. the disaster reduction institutions and the insurance industry. We report about an ongoing project addressing the vulnerabilities of sectors affected and policy options in various sectors, notably "Storms over NW-Europe", "the insurance sector" (both as a sector impacted by change and as a mechanism to cope with risk) and "cyclones in the South Pacific".

It is argued that the predictability of meteorological variables is not constant but shows regular variations. This is shown for the daily mean summer and winter temperatures at De Bilt, The Netherlands, over the last 30 years. To capture this feature, a generalized autoregressive conditional heteroscedastic (GARCH) model is proposed. In this model, the conditional variance of an observation depends linearly on the conditional variances of the previous observations and on the previous prediction errors. Here a GARCH(1,1) model is used for both the conditional variance and the conditional standard deviation, in conjunction with an AR(2) model for the mean, and conditionally normal errors. It is shown that these heteroscedastic models outperform their homoscedastic versions, and that the model which updates the conditional standard deviation is preferred.

Economic assessments of climate change impacts are commonly presented as the effect of a climate change associated with a doubling of the atmospheric concentration of carbon dioxide on the current economy. This paper is an attempt to express impact as a function of both climate change and socio- economic change. With regard to climate change, issues discussed are level versus rate of change, speed of adaptation, speed of restoration and value adjustment, and symmetry. With regard to socio economic change, agriculture, migration and the valuation of intangible losses are addressed. Uncertainty and higher order impacts are treated briefly. It is qualitatively argued and quantitatively illustrated that these issues matter a great deal for the damage profile over the next century. A damage model, based on my best guesses, is presented in the Appendix.

Adaptation to climate change and mitigation of climate change are policy substitutes, as both reduce the impacts of climate change. Adaptation and mitigation should therefore be analysed together, as they indeed are, albeit in a rudimentary way, in cost-benefit analyses of emission abatement. However, adaptation and mitigation are done by different people operating at different spatial and temporal scales. This hampers analysis of the trade-offs between adaptation and mitigation. An exception is facilitative adaptation (enhancing adaptive capacity), which, like mitigation, requires long-term policies at macro level. Facilitative adaptation and mitigation not only both reduce impacts, but they also compete for resources.

There is an unknown but probably small probability that the West-Antarctic Ice Sheet (WAIS) will collapse because of anthropogenic climate change. A WAIS collapse could cause a 5-6 metre global sea level rise within centuries. In three case studies, we investigate the response of society to the most extreme yet not implausible scenario, a five-metre sea level rise within a century, starting in 2030. The case studies combine a series of interviews with experts and stakeholders with a gaming workshop. In the Rhone delta, the most likely option would be retreat, with economic losses, perhaps social losses, and maybe ecological gains. In the Thames estuary, the probable outcome is less clear, but would probably be a mix of protection, accommodation and retreat, with parts of the city centre turned into a Venice of London. A massive downstream barrier is an alternative response. In the Rhine delta (the Netherlands), the initial response would be protection, followed by retreat from the economically less important parts of the country and, probably, from Amsterdam-Rotterdam metropolitan region as well. These impacts are large compared to other climate change impacts, but probably small compared to the impacts of the same scenario in other parts of the world. This suggests that the possibility of a anthropogenic-climate-change-induced WAIS collapse would strengthen the case for greenhouse gas emission reduction.

It is argued that the predictability of meteorological variables is not constant but shows regular variations. This is shown for the daily mean wind speeds and its meridional and zonal components at Shearwater, Canada, for the period 1963-1988. To capture this feature, a Generalised Auto Regressive Conditional Heteroscedastic model is proposed. In this model, the conditional variance of an observation depends linearly on the conditional variances of the previous observations and on the previous prediction errors. Here, conditional heteroscedasticity models are used which let the variance depend on previous prediction errors, in conjunction with an autoregressive model for the mean, using the Gamma distribution for the wind speed and the Normal distribution for its components. It is shown that these heteroscedastic models outperform their homoscedastic versions, and that heteroscedastic features are more clear in the wind speed component records.

The economic value of environmental goods is commonly determined using the concepts of willingness to pay (WTP) or willingness to accept (WTA). However, the WTP/WTA observed in different countries (or between individuals) will differ according to socio-economic characteristics, in particular income. This notion of differentiated values for otherwise identical goods (say, a given reduction in mortality risk) has been criticized as unethical, most recently in the context of the 'social cost' chapter of the IPCC Second Assessment Report. These critics argue that, being a function of income, WTP/WTA estimates reflect the unfairness in the current income distribution, and for equity reasons uniform per-unit values should therefore be applied across individuals and countries. This paper analyses the role of equity in the aggregation of climate change damage estimates, using basic tools of welfare economies. It shows one way of how WTP/WTA estimates can be corrected in aggregation if the underlying income distribution is considered unfair. It proposes that in the aggregation process individual estimates be weighted with an equity factor derived from the social welfare and utility functions. Equity weighting can significantly increase aggregate (global) damage figures, although some specifications of weighting functions also imply reduced estimates. The paper also shows that while the postulate of uniform per-unit values is compatible with a wide range of 'reasonable' utility and welfare specifications, there are also cases where the common-value notion is not compatible with defensible welfare concepts.

Using publication, citation and h-numbers from the Scopus and Web of Science databases, we find that research output and academic influence of economists in the Republic of Ireland are heavily skewed by researcher and by institution. A subset of the results is confirmed by similar analyses based on EconLit, Google Scholar and IDEAS/REPEC. The analysis shows that while one university dominates in terms of numbers of economists, the more productive and most cited Irish research economists are spread across a range of institutions that are heavily concentrated in the Greater Dublin Area.

The paper discusses valuation issues in the context of climate change impact estimation. Issues addressed are aggregation of damage costs over diverse regions (particularly equity-weighting), differentiation of per-unit values, willingness to pay versus willingness to accept compensation as a basis for valuation, and accountability for impacts. Numerical illustrations show that the damage cost estimates are quite sensitive to the assumptions made on these issues.

Changes in solar activity are regularly forwarded as an hypothesis to explain the observed global warming over the last century. The support of such claims is largely statistical, as knowledge of the physical relationships is limited. The statistical evidence is revisited. Changing solar activity is a statistically plausible hypothesis for the observed warming, if short-term natural variability is the only alternative explanation. Compared to the enhanced greenhouse effect, the solar hypothesis looses a substantial part of its plausibility. Reversely, the size and significance of the estimated impact of the enhanced greenhouse effect on the global mean temperature is hardly affected by solar activity.

This paper demonstrates that there is a robust statistical relationship between the records of the global mean surface air temperature and the atmospheric concentration of carbon dioxide over the period 1870-1991. As such, the enhanced greenhouse effect is a plausible explanation for the observed global warming. Long term natural variability is another prime candidate for explaining the temperature rise of the last century. Analysis of natural variability from paleo-reconstructions, however, shows that human activity is so much more likely an explanation that the earlier conclusion is not refuted. But, even if one believes in large natural climatic variability, the odds are invariably in favour of the enhanced greenhouse effect. The above conclusions hold for a range of statistical models, including one that is capable of describing the stabilization of the global mean temperature from the 1940s to the 1970s onwards. This model is also shown to be otherwise statistically adequate. The estimated climate sensitivity is about 3.8°C with a standard deviation of 0.9°C, but depends slightly on which model is preferred and how much natural variability is allowed. These estimates neglect, however, the fact that carbon dioxide is but one of a number of greenhouse gases and that sulphate aerosols may well have dampened warming. Acknowledging the fact that carbon dioxide is used as a proxy for all human induced changes in radiative forcing brings a lot of additional uncertainty. Prior knowledge on both climate sensitivity and radiative forcing is needed to say anything about the respective sizes. A fully Bayesian approach is used to combine expert knowledge with information from the observations. Prior knowledge on the climate sensitivity plays a dominant role. The data largely exclude climate sensitivity to be small, but cannot exclude climate sensitivity to be large, because of the possibility of strong negative sulphate forcing. The posterior of climate sensitivity has a strong positive skewness. Moreover, its mode (again 3.8 °C; standard deviation 2.4°C) is higher than the best guess of the IPCC.

The behaviour of future policy-makers substantially influences future greenhouse gas emissions. Uncertainty about the motives of future policy-makers may thus strongly influence the climate policy strategies of current policy-makers. Analytical and numerical analyses in this paper confirm this hypothesis. If current policy-makers want to constrain emissions accumulated over a prolonged period of time, and if future policy-makers tend, with a certain chance, to a less ambitious climate policy, then current policy-makers should intensify their efforts to reduce emissions and the cost of emission reduction. In this setting, if current policy-makers want to meet a cumulative emission contraint in expectation, then the preferred policy trajectory does not qualitatively deviate from one suggested by a standard cost-effective trajectory. If, however, the constraint is to be met with a certain probability, then the importance of early action is enhanced relative to that of postponed action. Costs substantially increase if current policy-makers want to set long-term goals without the full cooperation of future policy-makers.

This paper applies the theory of social situations to study whether international environmental agreements (IEAs), mainly those on greenhouse gas emission reductions, can be attained. A game theoretic model is generally a black box for decision makers, where the mechanisms, which lead to solution(s) of the game, are not explicitly pointed out. This paper opens this black box by making the (institutional) move rules explicit. The usual pessimistic outcome with an ineffective and small size of stable coalitions among world regions is countered. Our model challenges conventional wisdom in the sense that large coalitions are possible outcomes of the cartel game, namely by incorporating: (1) farsightedness, and (2) coalitional moves with commitment as an alternative to myopic and individual moves which characterise the cartel game. We show that even if the international negotiations on climate change mitigation are modelled as an n-person prisoner's dilemma, one cannot rule out cooperation among world regions as a solution of the game. Indeed, in most analysed situations the grand coalition is among the solutions of the game. This shows that predictions based on cartel stability may be too pessimistic if it comes to analysing incentives to cooperate in implementing international environmental policy. Moreover, in an empirically calibrated model, we find three out of six instances where Russia (with or without the US) has an incentive to sign the Kyoto protocol.

Several issues relating to insurance and the damage costs of climate change are discussed. It is argued that the option of insuring climate change is severely limited because the associated damages are hardly quantifiable and little diversifiable; in addition, binding contracts are a problem on long time scales and in an international context. Hedging, consumption smoothing over time, precautionary investments and liability are not to be presented under the heading of insurance, not only because this unnecessarily and confusingly expands the traditional definition of insurance, but also because this could create a false sense of security. The impact of climate change on the profitability of the commercial insurance sector is not likely to be severe, as the insurance companies are capable of shifting changed risks to the insured, provided that they are properly and timely informed on the consequences of climate change.

We examine the impacts of the EU-US Open Skies agreement on the environment on emissions from the aviation sector. We use the Hamburg Tourism Model of domestic and international tourist numbers and flows, to estimate these impacts. The Open Aviation Area will result in increased competition between carriers and falls in the cost of transatlantic flights. This will not only have implications for the size and structure of the industry but also for climate policy. The paper assesses what effects the expected increases in passenger numbers will have on CO2 emissions and tests whether this increase in travel will result in a corresponding rise in emissions. Simulations show that passenger numbers arriving from the US to the EU will increase by between 1% and 14% depending on the magnitude of the price reductions because of substitution between destinations, the percentage increase in global emissions is much smaller (max. 1%) than the increase in cross-Atlantic traffic.

We investigate the relationship between a thousand-year history of violent conflict in Europe and various reconstructions of temperature and precipitation. We find that conflict was more intense during colder period, just like Zhang et al. (Clim Change 76:459-477, 2006) found for China. This relationship weakens in the industrialized era, and is not robust to the details of the climate reconstruction or to the sample period. As the correlation is negative and weakening, it appears that global warming would not lead to an increase in violent conflict in temperature climates.

The literature on tourism and climate change lacks an analysis of the global changes in tourism demand. Here, a simulation model of international tourism is presented that fills that gap. The current pattern of international tourist flows is modelled using 1995 data on departures and arrivals for 207 countries. Using this basic model the impact on arrivals and departures through changes in population, per capita income and climate change are analysed. In the medium to long term, tourism will grow, however, the change from climate change is smaller than from population and income changes.

A model of carbon dioxide emissions of the USA is presented. The model consists of population, income per capita, economic structure, final and primary energy intensity per sector, primary fuel mix, and emission coefficients. The model is simple enough to be calibrated to observations since 1850. The model is used to project emissions until 2100. Best-guess carbon dioxide emissions are in the middle of the IPCC SRES scenarios, but incomes and energy intensities are on the high side, while carbon intensities are on the low side. The confidence interval suggests that the SRES scenarios do not span the range of non-implausible futures. Although the model can be calibrated to reflect structural changes in the economy, it cannot anticipate such changes. The data poorly constrain crucial scenario elements, particularly energy prices. This suggests that the range of future emissions is wider still.

Climate change may well increase malaria morbidity and mortality. This would slow economic growth through increased spending on health care, reduced production, and less effective education. Slower economic growth would increase the incidence of malaria morbidity and mortality. The integrated assessment model FUND is used to estimate the strength of this negative feedback. Although climate-change-induced health problems may well substantially affect the projected growth path of developing regions, it is unlikely that climate change would reverse economic growth due to the impacts considered here. Even in sub-Saharan Africa, an area thought to be very sensitive to climate change and associated health effect, the impact, while detectable, is small and unlikely to reverse economic growth.

An analytically tractable approximation of a numerical model is used to investigate coalition formation between nine major world regions with regard to their policies for greenhouse gas emission reduction. Full cooperation is not individually rational. Assuming non-transferable utility, side payments do not ensure full cooperation either. Without side payments, the largest stable coalitions are small and consist of similar regions. With side payments, the largest stable coalitions exclude either the main culprits or the main victims of climate change. In all cases, optimal emission control is modest.

This study uses country-level panel data on consumption in Ireland and seven other OECD countries to examine the evolution of Irish consumption patterns as Ireland underwent rapid macroeconomic growth. Consumption levels obviously increased due to substantially higher incomes, but it is less clear how the shares of different types of goods purchased have changed or whether Ireland's consumption mix has converged with that of other high-income countries. Rankings based on a simple distance measure of consumption similarity suggest that Ireland moved from a "low-income" pattern similar to Portugal or Greece to a "high-income" pattern like that of Canada between 1995 and 2003. Using static and dynamic Almost Ideal Demand System models, we first estimate long- and short-run Irish price and income elasticities for nine categories of commodities between 1976 and 2003. These results provide evidence of substantial habit formation in aggregate consumption. We then estimate a long-run cross-country model covering six aggregate commodity groups between 1975 and 2003. The analysis shows that Ireland's demand parameters remain more similar to those of Greece than to higher-income OECD countries in the sample. Although Ireland has overtaken most other OECD countries in per capita income, it is still converging to a higher-income consumption pattern. We foresee further convergence of Irish expenditure patterns towards a pattern typical of high-income countries.

I propose a new method (Pareto weights) to objectively attribute citations to co-authors. Previous methods either profess ignorance about the seniority of co-authors (egalitarian weights) or are based in an ad hoc way on the order of authors (rank weights). Pareto weights are based on the respective citation records of the co-authors. Pareto weights are proportional to the probability of observing the number of citations obtained. Assuming a Pareto distribution, such weights can be computed with a simple, closed-form equation but require a few iterations and data on a scholar, her co-authors, and her co-authors' co-authors. The use of Pareto weights is illustrated with a group of prominent economists. In this case, Pareto weights are very different from rank weights. Pareto weights are more similar to egalitarian weights but can deviate up to a quarter in either direction (for reasons that are intuitive).

Climate change may intensify tropical cyclone activities and amplify their negative economic effects. We simulated the direct economic impact of tropical cyclones enhanced by climate change with the integrated assessment model Climate Framework for Uncertainty, Negotiation and Distribution (FUND), Version 3.4. The results show that in the basic case (parameter levels based on intermediate estimates), the direct economic damage caused by tropical cyclones ascribed to the effect of climate change would amount to US$19 billion globally in the year 2100 (almost the same level as the baseline, i.e. current global damage of tropical cyclones), while the ratio to world gross domestic product (GDP) would be 0.006%. The USA and China account for much of the absolute damage, whereas Small Island States incur the largest damage if evaluated as the proportion of GDP. Model results were sensitive to the choice of baseline and of the wind-speed elasticity of storm damage.

This paper warns against the risk of underestimating the costs-and the uncertainty about the costs-of achieving stringent stabilization targets. We argue that a straightforward review of integrated assessment models results produces biased estimates for the more ambitious climate objectives such as those compatible with the 2°C of the European Union and the G8. The magnitude and range of estimates are significantly reduced because only the most optimistic results are reported for such targets. We suggest a procedure that addresses this partiality. The results show highly variable costs for the most ambitious scenarios.

Vegetarianism is increasing in the western world. This trend can be attributed to heightened health, environmental and animal welfare concerns. In this paper we investigate the factors associated with vegetarianism and pescetarianism among adults in Ireland. Using the 2007 Survey of Lifestyles, Attitudes and Nutrition (SLÁN), we use logit models to assess the relationship between vegetarianism and the socio-economic and personal characteristics of the respondents. We also analyse the factors associated with varying levels of meat and fish consumption using ordinary least squares. We find that household size, age, income and education explain meat and fish consumption; and that marital status, health indicators, and lifestyle are associated with meat and fish consumption.

A collapse of the West-Antarctic Ice Sheet (WAIS) would cause a sea level rise of 5-6 m, perhaps even within 100 years, with catastrophic consequences. The probability of such a collapse is small but increasing with the rise of the atmospheric concentrations of greenhouse gas and the resulting climate change. This paper investigates how the potential collapse of the WAIS affects the optimal rate of greenhouse gas emission control. We design a decision and learning tree in which decision are made about emission reduction at regular intervals: the decision makers (who act as social planners) have to decide whether to implement the environmental or not (keeping then the flexibility to act later). By investing in the environmental policy, they determine optimally the date of the optimal emission reduction. At the same time, they receive new information on the probability of a WAIS collapse and the severity of its impacts. The probability of a WAIS collapse is endogenous and contingent on greenhouse gas concentrations. We solve this optimisation problem by backward induction. We find that a potential WAIS collapse substantially bring the date of the optimal emission reduction forward and increases its amount if the probability is high enough (a probability of 1% per year for the worst case), if the impacts are high enough (a worst case damage of 10% of GDP for a 3°C warming) or if the decision maker is risk averse enough (for example a social damage due to pollution equal to 1% GDP for an atmospheric temperature of 3°C). We also find that, as soon as a WAIS collapse is a foregone fact, emission reduction falls to free up resource to prepare for adapting to the inevitable. By contrast, adaptation (such as building dikes along the coast) postpones policy intervention because that strategy reduces the risk of catastrophic damages.

Recently, in the economics literature, several papers have put forward arguments for using a declining discount rate in social-cost benefit analysis. This paper examines the impact of employing a declining discount rate on the social cost of carbon-the marginal social damage from a ton of emitted carbon. Six declining discounting schemes are implemented in the FUND 2.8 integrated assessment model, including the recent amendments to the Green Book of HM Treasury (Treasury, H.M., 2003. The Greenbook: Appraisal and Evaluation in Central Government. TSO, London). We find that using a declining schedule of discount rates increases the social cost of carbon estimate by as little as 10% or by as much as a factor of 40, depending upon the scenario selected. Although the range of plausible estimates is large, using declining discounting schemes in FUND 2.8 in most cases does not yield values at the £70/tC level suggested by UK DEFRA [Clarkson, R., Deyes, K., 2002. Estimating the social cost of carbon emissions. Government Economic Service Working Paper. HM Treasury, London]. Indeed, only at the higher end of the values of social cost of carbon found here would many climate change related policies - such as the Kyoto Protocol - pass a cost-benefit analysis. This conclusion, however, does not necessarily undermine the ethical and political economic reasons for supporting international collective action on climate change.

Climate change is likely to impact more severely on the poorer people of the world, because they are more exposed to the weather, because they are closer to the biophysical and experience limits of climate, and because their adaptive capacity is lower. Estimates of aggregated impacts necessarily make assumptions on the relative importance of sectors, countries and periods; we propose to make these assumption explicit. We introduce a Gini coefficient for climate change impacts, which shows the distribution of impacts is very skewed in the near future and will deteriorate for more than a century before becoming more egalitarian. Vulnerability to climate change depends on more than per capita income alone, so that the geographical pattern of vulnerability is complex, and the relationship between vulnerability and development non-linear and non-monotonous.

Under European Union proposals for CO2 emission reduction between 2013 and 2020, a Member State can transfer to another Member State the right to use its unused Clean Development Mechanism ("CDM") credits. The paper addresses three issues in relation to these CDM Warrants ("CDMW"). First, how should the Member State treat the CDMW in making decisions concerning emission reduction? The price of the property right is an important signal for a Member State in deciding the level of domestic abatement compared to trading in CDMWs. In other words, a shadow price for CDMWs should be used in formulating the emission strategy in order to determine whether or not a Member State is a buyer or seller of CDMWs. Second, what mechanism should be used to facilitate the exchange of CDMWs? The preferred mechanism depends on the market size, over which there appears to be some ambiguity: market intermediaries such as Over-the-Counter trades and exchanges are preferred if market size is small; auctions if the market size is large. Third, who should realise the value of CDMWs-the State, existing polluters, etc.? The value of CDMWs should accrue to the State.

Using a bioeconomic model of the cod (Gadus morhua) and capelin (Mallotus villosus) fisheries of the Barents Sea, this study assesses the role of the fishermen's behavior in reducing or intensifying the effects on the stocks caused by altered population dynamics. The analysis focuses on the economic development of the fisheries employing a coupled stock size-hydrography-based fishing strategy, which attempts to maximize returns from fishing over a given number of fishing periods. Results show that if the fishing strategy is based on a short optimization period of only two fishing periods, changes in population dynamics have a direct influence on the returns from fishing due to the strong pressure on the stocks applied by the fisheries. If the strategy is based on a longer optimization period, fishing activities may be deferred to allow for stock regrowth, which improves the economic performance of the fisheries. However, in that case, the relationship between population dynamics and fishing activities becomes less clear, as even a reduction of the carrying capacities of the two species allows for an increase in the amount of fish landed without causing a stock collapse due to an increased efficiency of fleet utilization. The simulations indicate that management considerations and the time horizon of the fishing strategy dominate the influence of altered population dynamics on the development of the stocks considered in the model.

Extratropical cyclones have attracted some attention in climate policy circles as a possible significant damage factor of climate change. This study conducts an assessment of economic impacts of increased storm activities under climate change with the integrated assessment model FUND 3.5. In the base case, the direct economic damage of enhanced storms due to climate change amounts to US$2.8 billion globally (approximately 38% of the total economic loss of storms at present) at the year 2100, while its ratio to the world GDP is 0.0009%. The paper also shows various sensitivity runs exhibiting up to 3 times the level of damage relative to the base run.

This paper applies the DIVA model to assess the risk of and adaptation to sea-level rise for the European Union in the 21st century under the A2 and B1 scenarios of the Intergovernmental Panel on Climate Change. For each scenario, impacts are estimated without and with adaptation in the form of increasing dike heights and nourishing beaches. Before 2050, the level of impacts is primarily determined by socio-economic development. In 2100 and assuming no adaptation, 780×103 people/year are estimated to be affected by coastal flooding under A2 and 200×103 people/year under B1. The total monetary damage caused by flooding, salinity intrusion, land erosion and migration is projected to be about US$ 17×109 under both scenarios in 2100; damage costs relative to GDP are highest for the Netherlands (0.3% of GDP under A2). Adaptation reduces the number of people flooded by factors of 110 to 288 and total damage costs by factors of 7 to 9. In 2100 adaptation costs are projected to be US$ 3.5×109 under A2 and 2.6×109 under B1; adaptation costs relative to GDP are highest for Estonia (0.16% under A2) and Ireland (0.05% under A2). These results suggest that adaptation measures to sea-level rise are beneficial and affordable, and will be widely applied throughout the European Union.

A bioeconomic model of key fisheries of the Barents Sea is run with scenarios generated by an earth system model of intermediate complexity to assess how the Barents Sea fisheries of cod (Gadus morhua) and capelin (Mallotus villosus) are affected by changes in the Atlantic thermohaline circulation (THC) arising from anthropogenic climate change. Changes in hydrographic conditions have an impact on recruitment success and survival rates, which constitute a lasting effect on the stocks. The economic development of the fisheries is determined for the 21st century, considering a purely stock size based and a coupled stock size-hydrography based harvesting strategy. Results show that a substantial weakening of the THC leads to impaired cod stock development, causing the associated fishery to become unprofitable in the long run. Simultaneous improvements in capelin stock development help the capelin fishery, but are insufficient to offset the losses incurred by the cod fishery. A comparison of harvest strategies reveals that in times of high variability in stock development, coupled stock size-hydrography based management leads to more stable economic results of these fisheries than the stock size based fishing strategy.

Demand management plays an increasingly important role in dealing with water scarcity in China. It is important to understand the level and pattern of water use in various sectors across the regions for any measures being put into effect. The aim of this study is to enhance the understanding of the factors that influence water demand by examining closely the water use in domestic, industrial and agricultural sectors. Using province level panel data from 1997 to 2003, the examination shows that the regional disparity in the level and pattern of water uses is considerable. The estimation of water demand shows that both economic and climatic variables have significant effects on water demand. The results suggest an income elasticity of 0.42 for the domestic sector, an output elasticity of -0.32 for industrial water use (per unit of output), and an output elasticity of -0.23 for irrigated agriculture (per land area).

We study the economic impacts of climate-change-induced change in human health, viz. cardiovascular and respiratory disorders, diarrhoea, malaria, dengue fever and schistosomiasis. Changes in morbidity and mortality are interpreted as changes in labour productivity and demand for health care, and used to shock the GTAP-E computable general equilibrium model, calibrated for the year 2050. GDP, welfare and investment fall (rise) in regions with net negative (positive) health impacts. Prices, production, and terms of trade show a mixed pattern. Direct cost estimates, common in climate change impact studies, underestimate the true welfare losses.

Developing optimal policies on management of water resources, investment in relevant infrastructure and the protection of the environment requires data on the current and likely future demand for water services. In jurisdictions without water metering, information on the factors influencing demand tends to be limited. Microdata from household surveys can provide some relevant information. Domestic water demand is influenced both by the number of households and their characteristics, in particular the extent to which they employ water-using appliances. This paper focuses on domestic ownership of water-using appliances in the Republic of Ireland, a country where rapid economic and demographic change have put pressure on water and sewerage infrastructure but where there is little domestic metering. Using a large household micro-dataset, we use regression analysis to examine the determinants of the water and sewage mains connection status of Irish homes and to identify the characteristics of households that are associated with having larger or smaller numbers of appliances. Our empirical results suggest that Ireland will have a rising share of mains water and sewerage connections in the future. Household income, house price, dwelling types other than 'detached', younger dwellings, and urban location are all positively associated with having a mains connection. The number of types of water-using appliance in a household is positively associated with income, house price, number of residents, owner-occupation, having children (or, to a lesser extent, multiple people) in the household, having a detached house, being located in a rural area and living in a dwelling built after 1997.

A bioeconomic simulation model of the two interacting fish species cod (Gadus morhua) and capelin (Mallotus villosus) and their fisheries is presented and applied to assess the consequences of changes in the population dynamics of these important fish stocks in the Barents Sea. In each scenario, the population dynamics of the fish species are changed by reducing the reproduction-induced productivities and/or the carrying capacities. Stock sizes and landings of fish are calculated for each fishing period, and the net present values of profits from fishing are determined for time periods prior to and after the change in population dynamics. Results show that reduced growth rates or carrying capacities lead to lower stock levels and consequently to smaller catches. There is only a small short-term economic impact on the fisheries, but the long-term consequences are pronounced. In some cases, greater fishing activity in the first few years after the change in population dynamics causes harvests to remain stable despite diminishing stock sizes. This stabilizes the returns from fishing in the short term, but veils the apparent negative long-term impact on the fisheries resulting from adversely affected stock dynamics. © 2006 International Council for the Exploration of the Sea.

The economy-wide implications of sea level rise in 2050 are estimated using a static computable general equilibrium model. This allows for a better estimate of the welfare effects of sea level rise than the common direct cost estimates; and for an estimate of the impact of sea level rise on greenhouse gas emissions. Overall, general equilibrium effects increase the welfare costs of sea level rise, but not necessarily in every sector or region. In the absence of coastal protection, economies that rely most on agriculture are hit hardest. Although energy is substituted for land, overall energy consumption falls with the shrinking economy, hurting energy exporters. With full coastal protection, GDP increases, particularly in regions with substantial dike building, but utility falls, least in regions that protect their coasts and export energy. Energy prices rise and energy consumption falls. The costs of full protection exceed the costs of losing land. The results also show direct costs - the usual method for estimating welfare changes due to sea level rise - are a bad approximation of the general equilibrium welfare effects; previous estimates of the economic impact of sea level rise are therefore biased.

While climate change impacts on human life have well defined and different origins, the interactions among the diverse impacts are not yet fully understood. Their final effects, however, especially those involving social-economic responses, are likely to play an important role. This paper is one of the first attempts to disentangle and highlight the role of these interactions. It focuses on the economic assessment of two specific climate change impacts: sea-level rise and changes in tourism flows. By using a Computable General Equilibrium (CGE) model the two impacts categories are first analysed separately and then jointly. Considered separately, in 2050, the forecasted 25 cm. of sea level rise imply a GDP loss ranging from (-) 0.1% in South East Asia to almost no loss in Canada, while redistribution of tourism flows - which in terms of arrivals favours Western Europe, Japan, Korea and Canada and penalises all the other world regions - triggers GDP losses ranging from (-) 0.5% in Small Island States to (-) 0.0004% in Canada. GDP gainers are Australia, New Zealand, Western Europe, Middle East and South Asia. The impact of sea level rise and tourism were simulated jointly and the results compared with those of the two disjoint simulations. From a qualitative point of view, the joint effects are similar to the outcomes of the disjoint exercises; from a quantitative perspective, however, impact interaction does play a significant role. In six cases out of 16 there is a detectable (higher than 2% and peaking to 70%) difference between the sum of the outcomes in the disjoint simulation and the outcomes of the joint simulations. Moreover, the relative contribution of each single impact category has been disentangled from the final result. In the case under scrutiny, demand shocks induced by changes in tourism flows outweigh the supply-side shock induced by the loss of coastal land.

Poorer countries are generally believed to be more vulnerable to climate change than richer countries because poorer countries are more exposed and have less adaptive capacity. This suggests that, in principle, there are two ways of reducing vulnerability to climate change: economic growth and greenhouse gas emission reduction. Using a complex climate change impact model, in which development is an important determinant of vulnerability, the hypothesis is tested whether development aid is more effective in reducing impacts than is emission abatement. The hypothesis is barely rejected for Asia but strongly accepted for Latin America and, particularly, Africa. The explanation for the difference is that development (aid) reduces vulnerabilities in some sectors (infectious diseases, water resources, agriculture) but increases vulnerabilities in others (cardiovascular diseases, energy consumption). However, climate change impacts are much higher in Latin America and Africa than in Asia, so that money spent on emission reduction for the sake of avoiding impacts in developing countries is better spent on vulnerability reduction in those countries.

We present a simulation model of the flow of tourists between 207 countries, used to study the impact of climate change on international tourism. The model almost perfectly reproduces the calibration year 1995, and performs well in reproducing the observations for 1980, 1985 and 1990. The model is used to generate scenarios of international tourist departures and arrivals for the period 2000-2075, with particular emphasis on climate change; we report variations on a single baseline scenario (A1B). The growth rate of international tourism is projected to increase over the coming decades, but may slow down later in the century, as demand for travel saturates. Emissions of carbon dioxide would increase quickly as well. With climate change, preferred destinations would shift to higher latitudes and altitudes. Tourists from temperate climates would spend more holidays in their home countries. As such tourists currently dominate the international tourism market, climate change would decrease worldwide tourism. Nevertheless, its effects are small compared to the baseline projections of population and economic growth.

The literature of welfare-maximising greenhouse gas emission reduction strategies pays remarkably little attention to equity. This paper introduces three ways to consider efficiency and equity simultaneously. The first method, inspired by Kant and Rawls, maximises net present welfare, without international cooperation, as if all regions share the fate of the region affected worst by climate change. Optimal emission abatement varies greatly depending on the spatial and temporal resolution, that is, the grid at which 'maximum impact' is defined. The second method is inspired by Varian's no-envy. Emissions are reduced so as to equalise total costs and benefits of climate change over all countries of the world and over all time periods. Emission reductions are substantial. This method approximately preserves the inequities that would occur in a world without climate change. The third method uses non-linear aggregations of welfare (the utilitarian default is linear) in a cooperative setting. This method cannot distinguish between sources of inequity. The higher the aversion to inequity, the higher optimal greenhouse gas emission reduction.

Climate change will give rise to different impacts in different countries, and different countries have different levels of development. Equity-weighted estimates of the (marginal) impact of greenhouse gas emissions reflect these differences. This paper analyses the impact of equity weighting on the marginal damage cost of carbon dioxide emissions, and reaches four main conclusions. First, equity-weighted estimates are substantially higher than estimates without equity-weights; equity-weights may even change the sign of the social cost estimates. Second, estimates differ by two orders of magnitude depending on the region to which the equity weights are normalised. Third, equity-weighted estimates are sensitive to the resolution of the impact estimates. Depending on the assumed intra-regional income distribution, estimates may be more than twice as high if national rather than regional impacts are aggregated. Fourth, variations in the assumed inequality aversion have different impacts in different scenarios, not only because different scenarios have different emissions and hence warming, but also because different scenarios have different income differences, different growth rates, and different vulnerabilities.

A selection of the potential impacts of climate change - on agriculture, forestry, unmanaged ecosystems, sea level rise, human mortality, energy consumption, and water resources - are estimated and valued in monetary terms. Estimates are derived from globally comprehensive, internally consistent studies using GCM based scenarios. An underestimate of the uncertainty is given. New impact studies can be included following the meta-analytical methods described here. A 1°C increase in the global mean surface air temperature would have, on balance, a positive effect on the OECD, China, and the Middle East, and a negative effect on other countries. Confidence intervals of regionally aggregated impacts, however, include both positive and negative impacts for all regions. Global estimates depend on the aggregation rule. Using a simple sum, world impact of a 1°C warming would be a positive 2% of GDP, with a standard deviation of 1%. Using globally averaged values, world impact would be a negative 3% (standard deviation: 1%). Using equity weighting, world impact would amount to 0% (standard deviation: 1%).

Monetised estimates of the impact of climate change are derived. Impacts are expressed as functions of climate change and 'vulnerability'. Vulnerability is measured by a series of indicators, such as per capita income, population above 65, and economic structure. Impacts are estimated for nine world regions, for the period 2000-2200, for agriculture, forestry, water resources, energy consumption, sea level rise, ecosystems, fatal vector- borne diseases, and fatal cardiovascular and respiratory disorders. Uncertainties are large, often including sign switches. In the short term, the estimated sensitivity of a sector to climate change is found to be the crucial parameter. In the longer term, the change in the vulnerability of the sector is often more important for the total impact. Impacts can be negative or positive, depending on the time, region, and sector one is looking at. Negative impacts tend to dominate in the later years and in the poorer regions.

There are no observations for methane emissions from landfill waste in Ireland. Methane emissions are imputed from waste data. There are intermittent data on waste sent to landfill. We compare two alternative ways to impute the missing waste " data" and evaluate the impact on methane emissions. We estimate Irish historical landfill quantities from 1960-2008 and Irish methane emissions from 1968-2006. A model is constructed in which waste generation is a function of income, price of waste disposal and, household economies of scale. A transformation ratio of waste to methane is also included in the methane emissions model. Our results contrast significantly with the Irish Environmental Protection Agency's (EPA) figures due to the differences in the underlying assumptions. The EPA's waste generation and methane emission figures are larger than our estimates from the early 1990s onwards. Projections of the distance to target show that the EPA overestimates the required policy effort.

The economic value of environmental goods is commonly determined using the concepts of willingness to pay (WTP) or willingness to accept (WTA). However, the WTP/WTA observed in different countries (or between individuals) will differ according to socio-economic characteristics, in particular income. This paper analyses the issue of equity and valuation in the context of climate change using the basic tools of welfare economics. It shows how WTP/WTA estimates can be corrected if the underlying income distribution is considered unfair. It proposes that in the aggregation process individual estimates be weighted with an equity factor derived from the social welfare and utility functions. Equity weighting can significantly increase aggregated (global) damage figures, although some specifications of weighting functions also imply reduced estimates. The paper also shows that while the postulate of uniform per-unit values is compatible with a wide range of 'reasonable' utility and welfare specifications, there are also cases when the common-value notion is not compatible with defensible welfare concepts.

Regional estimates of direct cost (DC) are commonly used to measure the economic damages of sea level rise. Such estimates suffer from three limitations: (i) values of threatened endowments are not well known, (ii) loss of endowments does not affect consumer prices, and (iii) international trade is disregarded. Results in this paper indicate that these limitations can significantly affect economic assessments of sea level rise. Current uncertainty regarding endowment values (as reflected in two alternative data sets), for example, leads to a 17 percent difference in coastal protection, a 36 percent difference in the amount of land protected, and a 36 percent difference in DC globally. Also, global losses in equivalent variation (EV), a welfare measure that accounts for price changes, are 13 percent higher than DC estimates. Regional EV losses may be up to 10 percent lower than regional DC, however, because international trade tends to redistribute losses from regions with relatively high damages to regions with relatively low damages.

The European Commission as a whole and a number of its Member States individually have adopted a stringent long-term target for climate policy, namely that the global mean temperature should not rise more than 2 °C above pre-industrial times. This target is supported by rather thin arguments, based on inadequate methods, sloppy reasoning, and selective citation from a very narrow set of studies. In the scientific literature on "dangerous interference with the climate system", most studies discuss either methodological issues, or carefully lay out the arguments for or against a particular target. These studies do not make specific recommendations, with the exception of cost-benefit analyses, which unanimously argue for less stringent policy targets. However, there are also a few "scientific" studies that recommend a target without supporting argumentation. Overall, the 2 °C target of the EU seems unfounded.

Global Warming Potentials (GWPs) are evaluated with historical temperature by applying them to convert historical CH4 and N2O emissions to equivalent CO2 emissions. Our GWP analysis is based on an inverse estimation using the Aggregated Carbon Cycle, Atmospheric Chemistry, and Climate Model (ACC2). We find that, for both CH4 and N2O, indices higher than the Kyoto GWPs (100-year time horizon) would reproduce better the historical temperature. The CH4 GWP provides a best fit to the historical temperature when it is calculated with a time horizon of 44 years. However, the N2O GWP does not approximate well the historical temperature with any time horizon. We introduce a new exchange metric, TEMperature Proxy index (TEMP), that is defined so that it provides a best fit to the temperature projection of a given period. By comparing GWPs and TEMPs, we find that the inability of the N2O GWP to reproduce the historical temperature is caused by the GWP calculation methodology in IPCC using simplifying assumptions for the background system dynamics and uncertain parameter estimations. Furthermore, our TEMP calculations demonstrate that indices have to be progressively updated upon the acquisition of new measurements and/or the advancement of our understanding of Earth system processes.

Many regions of the world are facing formidable freshwater scarcity. Although there is substantial scope for economizing on the consumption of water without affecting its service level, the main response to water scarcity has been to increase the supply. To a large extent, this is done by transporting water from places where it is abundant to places where it is scarce. At a smaller scale and without a lot of public and political attention, people have started to tap into the sheer limitless resource of desalinated water. This study looks at the development of desalination and its costs over time. The unit costs of desalinated water for five main processes are evaluated, followed by regressions to analyze the main influencing factors to the costs. The unit costs for all processes have fallen considerably over the years. This study suggests that a cost of $1/m3 for seawater desalination and $0.6/m3 for brackish water would be feasible today. The costs will continue to decline in the future as technology progresses. In addition, a literature review on the costs of water transport is conducted in order to estimate the total cost of desalination and the transport of desalinated water to selected water stress cities. Transport costs range from a few cents per cubic meter to over a dollar. A 100 m vertical lift is about as costly as a 100 km horizontal transport ($0.05-0.06/m3). Transport makes desalinated water prohibitively expensive in highlands and continental interiors but not elsewhere.

As economic and emissions scenarios assume convergence of per capita incomes, they are sensitivity to the exchange rate used for international comparison. Particularly, developing countries are project to grow slower with a purchasing power exchange rate than with a market exchange rate. Different exchange rates may lead to scenarios with very different per capita incomes. However, these scenarios also assume convergence of energy intensities, which at least partly offsets the income effect, so that scenarios with different exchange rates would differ less in greenhouse gas emissions. Differences become smaller still if atmospheric concentrations and global warming is considered. However, differences become larger again if one considers the costs of meeting a certain stabilisation target, as the gap between baseline and target is more sensitive to the exchange rate used than the baseline itself. Differences also grow larger if one looks at climate change impacts, which are determined not just by climate change but also by development. The sensitivity to the exchange rate is purely due to imperfect data, imperfect statistical analysis of data, a crude spatial resolution, and imperfect models.

We analyse games of greenhouse gas emission reduction in which the emissions and the emission reduction costs of one country depend on other countries' emission abatement. In an analytically tractable model, we show that international trade effects on costs and emissions can either increase or decrease incentives to reduce emissions and to cooperate on emission abatement; in some specifications, optimal emission reduction is unaffected by trade. We therefore specify the model further, calibrating it to larger models that estimate the costs of emission reduction, trade effects, and impacts of climate change. If trade effects are driven by total emission reduction costs of other countries cooperation is slightly more difficult than in the case without trade effects. If trade effects are determined by relative emission reduction efforts in other countries, cooperation becomes easier. Carbon leakage does not affect our qualitative insights, although it does change the numbers.

The threat of an abrupt and extreme rise in sea level is widely discussed in the media, but little understood in practise, especially the likely impacts of such a rise including a potential adaptation response. This paper explores for the first time the global impacts of extreme sea-level rise, triggered by a hypothetical collapse of the West Antarctic Ice Sheet (WAIS). As the potential contributions remain uncertain, a wide range of scenarios are explored: WAIS contributions to sea-level rise of between 0.5 and 5 m/century. Together with other business-as-usual sea-level contributions, in the worst case this gives an approximately 6-m rise of global-mean sea level from 2030 to 2130. Global exposure to extreme sea-level rise is significant: it is estimated that roughly 400 million people (or about 8% of global population) are threatened by a 5-m rise in sea level, just based on 1995 data. The coastal module within the Climate Framework for Uncertainty, Negotiation and Distribution (FUND) model is tuned with global data on coastal zone characteristics concerning population, land areas and land use, and then used for impact analysis under the extreme sea-level rise scenarios. The model considers the interaction of (dry)land loss, wetland loss, protection costs and human displacement, assuming perfect adaptation based on cost-benefit analysis. Unlike earlier analyses, response costs are represented in a non-linear manner, including a sensitivity analysis based on response costs. It is found that much of the world's coast would be abandoned given these extreme scenarios, although according to the global model, significant lengths of the world's coast are worth defending even in the most extreme case. This suggests that actual population displacement would be a small fraction of the potential population displacement, and is consistent with the present distribution of coastal population, which is heavily concentrated in specific areas. Hence, a partial defence can protect most of the world's coastal population. However, protection costs rise substantially diverting large amounts of investment from other sectors, and large areas of (dry)land and coastal wetlands are still predicted to be lost. Detailed case studies of the WAIS collapse in the Netherlands, Thames Estuary and the Rhone delta suggest greater abandonment than shown by the global model, probably because the model assumes perfect implementation of coastal protection and does not account for negative feedbacks when implementation is imperfect. The significant impacts found in the global model together with the potential for greater impacts as found in the detailed case studies shows that the response to abrupt sea-level rise is worthy of further research.

There is a growing literature measuring research excellence in economics. The h-index is noteworthy in combining quantity and research quality in a single measure of researcher excellence, and its ability to be extended to measure the quantity and quality of the researchers in a department. We extend the use of the first successive h-index further to measure the quality of graduate education, specifically excellence in research supervision, based on publication and citation data for individual researchers ascribed to their graduate supervisors.

This paper uses a McFadden choice model to measure the importance of destination, household and seasonal characteristics to the tourism destination choices of Irish households. The analysis is based on quarterly survey data of Irish households' travel destinations between 2000 and 2006. In total, some 55,000 holiday trips were observed. Destination characteristics such as temperature, GDP and coastline are found to positively influence choice probabilities, while population density and distance have a negative effect on choice. Household-specific characteristics such as the number of children and people over 60 in a household are found to be important. We also identify differences in preferences across seasons and a change over time of the effect of destination country GDP on Irish holiday destination choices.

GCMs project higher temperatures for all of Europe, with greater changes at higher latitudes. In Northern and Western Europe, winter precipitation may increase, and summer precipitation may remain unchanged. Different models show different changes for Southern, Central and Eastern Europe. Water resources follow roughly the same patterns, although higher temperatures increase the risk of summer droughts, particularly in Southern and Central Europe. In Western Europe, river floods may increase. Vegetation patterns may drastically change, with some species and communities expanding and other shrinking. Particularly vulnerable are ecosystems depending on northern cold, and ecosystems isolated by geography or human activity. On the whole, agriculture would seem to benefit from climatic change, although not-well-understood pests and water availability may alter this. Sea level rise would negatively affect low-lying coasts and deltas, which support important natural and human systems. In a warmer climate, cold-related health problems would decline, but heat-related ones would increase. Tentatively, the balance is reduced mortality. Less important climate-related diseases would, on balance, increase. Research on other sector has progressed less far; results show mixed positive and negative impacts. Expressing all impact in money and adding up suggests a light negative overall impact of climate change on Europe.

The integrated assessment model FUND 2.8n is applied in an assessment to estimate the magnitude of the general market and non-market impacts of temperature changes caused by a possible shutdown of the thermohaline circulation (THC). The monetized impacts of this change in environmental conditions are determined for 207 individual countries for two scenarios: one warming scenario in which the THC weakens but remains intact, and another in which the THC breaks down. Eight different response patterns are identified. The dominant pattern is that a THC shutdown has an offsetting effect on the underlying warming trend. Depending on whether the impacts of warming are initially beneficial or detrimental, the economic effects of a THC shutdown show distinct regional variability. Key economic sectors affected are water resources and energy consumption, as well as cardiovascular and respiratory diseases among health impacts. The maximum national impact of a shutdown of the THC turns out to be of the magnitude of a few per cent of GDP, but the average global impact is much smaller. The results indicate that the temperature effect of a THC shutdown does not create an insurmountable economic threat on a global scale, but may cause severe damages to individual countries. However, a consideration of other climatic impacts such as precipitation and sea level changes is likely to alter the identified trends in economic development.

Tourism, being volatile and situation-specific, is responsive to climate change. A cross-section analysis is conducted on destinations of OECD tourists and a factor and regression analysis on holiday activities of Dutch tourists, to find optimal temperatures at travel destination for different tourists and different tourist activities. Globally, OECD tourists prefer a temperature of 21°C (average of the hottest month of the year) at their choice of holiday destination. This indicates that, under a scenario of gradual warming, tourists would spend their holidays in different places than they currently do. The factor and regression analysis suggests that preferences for climates at tourist destinations differ among age and income groups.

This paper studies the impact of international climate policy on the economy and structure of the energy sector in Indonesia . We use an extended version of MERGE - Model for Evaluating the Regional and Global Effects of Greenhouse Gas Reduction Policies - to project Indonesia's energy development till the year 2100, for a business-as-usual and various mitigation scenarios. If the Organisation for Economic Co-operation and Development countries were to reduce emissions, Indonesia would export more gas but less oil and its per capita income would fall slightly. With international trade in emission permits, Indonesia would be an exporter of carbon permits as energy export sectors are almost the same as without emission abatement, but Indonesia would suffer a minor loss of income. If the country anticipates emission reduction targets relative to some future emissions, then it should increase its emissions in the short run. It should postpone exploiting its gas reserves and initially rely more on coal and imported oil. It could then become a substantial exporter of internationally tradable emission permits. If it anticipates emission reduction targets relative to currently projected emissions, then the optimal exploitation of coal gets shifted forward in time while gas exploitation moves backward, but to a lesser extent. Economic losses will be greater, but still not very large. International trade in emission permits would make the exploitation of Indonesia's coal reserves economically unattractive.

Taking the Special Report on Emission Scenarios (SRES) climate and socio-economic scenarios (A1FI, A2, B1and B2 'future worlds'), the potential impacts of sea-level rise through the twenty-first century are explored using complementary impact and economic analysis methods at the global scale. These methods have never been explored together previously. In all scenarios, the exposure and hence the impact potential due to increased flooding by sea-level rise increases significantly compared to the base year (1990). While mitigation reduces impacts, due to the lagged response of sea-level rise to atmospheric temperature rise, impacts cannot be avoided during the twenty-first century by this response alone. Cost-benefit analyses suggest that widespread protection will be an economically rational response to land loss due to sea-level rise in the four SRES futures that are considered. The most vulnerable future worlds to sea-level rise appear to be the A2 and B2 scenarios, which primarily reflects differences in the socio-economic situation (coastal population, Gross Domestic Product (GDP) and GDP/capita), rather than the magnitude of sea-level rise. Small islands and deltaic settings stand out as being more vulnerable as shown in many earlier analyses. Collectively, these results suggest that human societies will have more choice in how they respond to sea-level rise than is often assumed. However, this conclusion needs to be tempered by recognition that we still do not understand these choices and significant impacts remain possible. Future worlds which experience larger rises in sea-level than considered here (above 35 cm), more extreme events, a reactive rather than proactive approach to adaptation, and where GDP growth is slower or more unequal than in the SRES futures remain a concern. There is considerable scope for further research to better understand these diverse issues.

We study the effects of development and climate change on infectious diseases in Sub-Saharan Africa. Infant mortality and infectious disease are closely related, but there are better data for the former. In an international cross-section, per capita income, literacy, and absolute poverty significantly affect infant mortality. We use scenarios of these three determinants and of climate change to project the future incidence of malaria, assuming it to change proportionally to infant mortality. Malaria deathswill first increase, because of population growth and climate change, but then fall, because of development. This pattern is robust to the choice of scenario, parameters, and starting conditions; and it holds for diarrhoea, schistosomiasis, and dengue fever as well. However, the timing and level of the mortality peak is very sensitive to assumptions. Climate change is important in the medium term, but dominated in the long term by development. As climate can only be changed with a substantial delay, development is the preferred strategy to reduce infectious diseases even if they are exacerbated by climate change. Development can, in particular, support the needed strengthening of disease control programs in the short run and thereby increase the capacity to cope with projected increases in infectious diseases over the medium to long term. This conclusion must, however, be viewed with caution, because development, even of the sort envisioned in the underlying socio-economic scenarios, is by no means certain.

Tol (2003) questioned the applicability of expected cost-benefit analysis to global mitigation policy when he found evidence that the uncertainty surrounding estimates of the marginal damage of climate change could be infinite even if total damages were finite. Yohe (2003) suggested that this problem could be alleviated if international development aid were directed at eliminating the source of the problem - climate induced negative growth rates in a few regions along a handful of troublesome scenarios. The hypothesis about adding a second policy lever to the climate policy calculus is shown to hold, though perhaps not as robustly as originally thought. A portfolio of international policies with at least two independent tools can avoid infinite uncertainty on the margins and the associated implications for global mitigation policy at a reasonable price even in the relatively unlikely event that climate change causes negative economic growth in a region or two.

We derive a global social welfare function that is consistent with the burden sharing in the Kyoto Protocol and in one proposal for a post-Kyoto treaty. The Kyoto Protocol favored the EU, while the EU post-Kyoto proposal puts more weight on the wellbeing of other OECD countries at the expense of EU residents. Ignoring income differences, the EU proposal for a post-Kyoto treaty favors developing countries. However, if income differences are taken into account, the EU proposal is not at all generous to developing countries.

The EU has proposed four flexibility mechanisms for the regulation of greenhouse gas emissions in the period 2013-2020: (1) the Emissions Trade Scheme (ETS), a permit market between selected companies; (2) trade in non-ETS allotments between Member States; (3) the Clean Development Mechanism (CDM) to purchase offsets in developing countries; and (4) trade in CDM warrants between Member States. This paper shows that aggregate abatement costs fall as flexibility increases. However, limited flexibility creates rents so that increasing flexibility raises costs in some Member States. Costs are reduced more by the CDM than by non-ETS trade. The CDM warrants market reduces costs by a small amount only; market power is a real issue. However, the warrants market is obsolete in case there is non-ETS trade. The CDM leads to price convergence between the ETS and non-ETS market. There would be one price for carbon in the European Union if the proposed limits on CDM access are relaxed slightly.

The EU proposal on greenhouse gas emission reduction has 28 targets for 2020: an EU-wide one for CO2 emissions covered by the European Trading System (ETS), and one target for non-ETS emissions per Member State. Implementation is more expensive than needed. I consider three alternative proposals to reduce costs. In the Irish proposal, Member States can purchase ETS permits to offset excess non-ETS emissions. In the Polish proposal, Member States can sell excess non-ETS emissions in the ETS. In the Swedish proposal, Member States can trade their non-ETS allocations. I compare these alternatives to the default policy (no flexibility outside the ETS) and the cost-effective solution (full flexibility). I calibrate a simple model to the results of the EU impact assessment, which did not disclose all details and made odd assumptions. The non-ETS allocation exceeds the projected emissions for three Member States. The alternative flexibility mechanisms would be used to only a limited extent, but would cut the costs of meeting the target. The Swedish and Polish proposals come closest to the cost-effective solution because of the hot air. The Irish proposal performs best if there are negative surprises in either abatement costs or emissions. The Swedish proposal will become policy.

Cost-benefit analysis is only applicable if the variances of both costs and benefits are finite. In the case of climate change, the variances of the net present marginal costs and benefits of greenhouse gas emission reduction need to be finite. Finiteness is hard, if not impossible to prove. The opposite is easier to establish as one only needs to show that there is one, not impossible representation of the climate change with infinite variance. The paper shows that all relevant current variables of the FUND model have finite variances. However, there is a small chance that climate change reverses economic growth in some regions. In that case, the discount rate becomes negative and the net present marginal benefits of greenhouse gas emission reduction becomes very large. So large, that its variance is unbounded. One could interpret this as an indication that cost-benefit analysis is invalid. Alternatively, one could argue that the infinity is present in both the base case and the policy scenario, and therefore irrelevant; in that interpretation, cost-benefit analysis is a valid tool.

This paper offers a practically motivated method for evaluating systems' abilities to handle external stress. The method is designed to assess the potential contributions of various adaptation options to improving systems' coping capacities by focusing attention directly on the underlying determinants of adaptive capacity. The method should be sufficiently flexible to accommodate diverse applications whose contexts are location specific and path dependent without imposing the straightjacket constraints of a "one size fits all" cookbook approach. Nonetheless, the method should produce unitless indicators that can be employed to judge the relative vulnerabilities of diverse systems to multiple stresses and to their potential interactions. An artificial application is employed to describe the development of the method and to illustrate how it might be applied. Some empirical evidence is offered to underscore the significance of the determinants of adaptive capacity in determining vulnerability; these are the determinants upon which the method is constructed. The method is, finally, applied directly to expert judgments of six different adaptations that could reduce vulnerability in the Netherlands to increased flooding along the Rhine River.

One problem in international climate policy is the refusal of large developing countries to accept emission reduction targets. Brazil, China and India together account for about 20% of today's CO2 emissions. We analyse the case in which there is no international agreement on emission reduction targets, but countries do have domestic targets, and trade permits across borders. We contrast two scenarios. In one scenario, Brazil, China and India adopt their business as usual emissions as their target. In this scenario, there are substantial exports of emission permits from developing to developed countries, and substantial economic gains for all. In the second scenario, Brazil, China and India reduce their emissions target so that they have no net economic gain from permit trade. Here, developing countries do not accept responsibility for climate change (as they bear no net costs), but they do contribute to an emission reduction policy by refusing to make money out of it. Adopting such break-even targets can be done at minor cost to developed and developing countries (roughly $2 bn /year each in extra costs and forgone benefits), while developing countries are still slightly better off than in the case without international emissions trade. This result is robust to variations in scenarios and parameters. It contrasts with Stewart and Wiener (2003) who propose granting 'hot air' to developing countries to seduce them to accept targets. In 2020, China and India could reduce their emissions by some 10% from the baseline without net economic costs.

China is a country with severe water shortages. Water is becoming scarcer due to population growth, industrialization and urbanization. Recent studies show that by the next 50 years water resources per capita will go down to around 1700 m3, which is the threshold of severe water scarcity. Especially in North China, water shortage has become a critical constraint factor for socioeconomic development in the long run. To solve or eliminate water shortage problems, seawater desalination draws more and more attention as an alternative water supply source. The objective of the study is to assess the potential of desalination as a viable alternate water source for China through analysis of the costs of desalination, the water demand and supply situation as well as water pricing practices in China. Based on the investment costs and estimated operation and maintenance costs, an economic appraisal for the costs of desalination for two main processes, MSF and RO, has been conducted. The study shows that there is a decline of unit cost of desalination over time and the average unit cost of the RO process was lower than that of the MSF process. A unit cost of 0.6 $/m3 for desalting brackish water and 1.0 $/m3 for seawater are suggested to be appropriate for the potential application of desalination in China. Future trends and challenges associated with water shortages and water prices are discussed, leading to conclusions and recommendations regarding the role of desalination as a feasible source of water for the future.

In this paper various emission reduction scenarios are evaluated with FUND - the Climate Framework for Uncertainty, Negotiation, and Distribution model. The aim is to help international negotiators improve upon the Kyoto Protocol. International cooperation in greenhouse gas emission reduction is important, and the more of it the better. The emission reduction targets as agreed in the Kyoto Protocol are irreconcilable with economic rationality. If the targets nevertheless need to be met, it is better to start emission reduction sooner than later in order to minimise costs. Methane emission reduction may be an important instrument to reduce costs. Copyright © 1999 by the IAEE. All rights reserved.

In this paper, we carry out a meta-analysis of recent studies into the costs of greenhouse gas mitigation policies that aim at the long-term stabilisation of these gases in the atmosphere. We find the cost estimates of the studies to be sensitive to the stringency of the stabilisation target, the assumed emissions baseline, the way in which the time profile of emissions is determined in the model, the choice of control variable (CO2 only versus multigas), the number of regions and energy sources in the model and, to a lesser degree, the scientific "forum" in which the study was developed. We find that marginal abatement costs of the stringent long-term targets that are currently considered by the European Commission are still very uncertain but might exceed the costs that have been suggested by recent policy assessments.

Methane is, after carbon dioxide, the most important anthropogenic greenhouse gas. Governments plan to abate methane emissions. A crude set of estimates of reduction costs is included in FUND, an integrated assessment model of climate change. In a cost-benefit analysis, methane emission reduction is found to be instrumental in controlling the optimal rate of climate change. In a cost-effectiveness analysis, methane emission reduction largely replaces carbon dioxide emission reduction. Methane emission reduction reinforces the case for international cooperation in climate policy, but complicates the efficient allocation of emission reduction efforts. Methane emission reduction at the short run does not help to achieve the ultimate objective of the Framework Convention on Climate Change.

FUND is an integrated assessment model of the interactions between climate and economy. Nine world regions emit greenhouse gases, and suffer damages from climate change. A number of greenhouse gas emission reduction policies are compared, including optimal and cost-effective strategies, strategies with early and late abatement, and strategies with and without international co-operation. The analyses confirm that co-operation matters, resulting in substantially lower costs or higher welfare. The real commitments of policy targets based on an absolute level (e.g., 1990 emissions) are hard to estimate because of the uncertainties in the baseline. Postponing action conflicts with minimising costs and maximising welfare, but so does sharp emission reduction at the short-term as proposed in the Kyoto Protocol.

[Ackermann, F., Stanton, E., 2008-this issue. A comment on economy-wide estimates of the implications of climate change: human health. Ecological Economics. doi:10.1016/j.ecolecon.2007.10.006] criticise our recent paper [Bosello, F., Roson, R., Tol, R.S.J., 2006. Economy-wide estimates of the implications of climate change: human health. Ecological Economics 58, 579-591] on different levels, calling it "mistaken" and "misleading". We welcome the opportunity to respond. The critique of [Ackermann, F., Stanton, E., 2008-this issue. A comment on economy-wide estimates of the implications of climate change: human health. Ecological Economics. doi:10.1016/j.ecolecon.2007.10.006] is either misdirected or incorrect.

The costs of greenhouse gas emission reduction with abatement of carbon dioxide, methane, and nitrous oxide are investigated using the FUND model. The central policy scenario keeps anthropogenic radiative forcing below 4.5 Win2. If CO2 emission reduction were the only possibility to meet this target, the net present value of consumption losses would be $45 trillion; with abatement of the other gases added, costsfall to $33 trillion. The bulk of these costs savings can be ascribed to reductions of nitrous oxide. Because nitrous oxide emission reduction is so much more important than methane emission reduction, the choice of equivalence metric between the greenhouse gases does not matter much. Sensitivity analyses show that the shape of the cost curves for CH4 and N2O emission reductions matter, and that the inclusion of sulphate aerosols makes policy targets substantially harder to achieve. The costs of emission reduction vary greatly with the choice of stabilisation target. A target of 4.5 WM-2 is not justified by our current knowledge of the damage costs of climate change.

Terrestrial vegetation sinks have entered the Kyoto Protocol as offsets for anthropogenic greenhouse gas emissions, but ocean sinks have escaped attention. Ocean sinks are as unexplored and uncertain as were the terrestrial sinks at the time of negotiation of the Kyoto Protocol. It is not unlikely that certain countries will advocate the inclusion of ocean carbon sinks to reduce their emission reduction obligations in post-2012 negotiations. We use a simple model of the international market for carbon dioxide emissions to evaluate who would gain or loose from allowing for ocean carbon sinks. Our analysis is restricted to information on anthropogenic carbon sequestration within the exclusive economic zone of a country. We use information on the actual carbon flux and derive the human-induced uptake for the period from 1990 onwards. Like the carbon sequestration of business as usual forest management activities, natural ocean carbon sequestration applies at zero costs. The total amount of anthropogenic ocean carbon sequestration is large, also in the exclusive economic zones. As a consequence, it substantially alters the costs of emission reduction for most countries. Countries such as Australia, Denmark, France, Iceland, New Zealand, Norway and Portugal would gain substantially, and a large number of countries would benefit too. Current net exporters of carbon permits, particularly Russia, would gain less and oppose the inclusion of ocean carbon sinks.

This paper discusses some of the elements that may characterise an efficient strategy to adapt to a changing climate. Such a strategy will have to reflect the long time horizon of, and the prevailing uncertainties about, climate change. An intuitively appealing approach therefore seems to be to enhance the flexibility and resilience of systems to react to and cope with climate shocks and extremes, as well as to improve information. In addition, in the case of quasi-irreversible investments with a long lifetime (e.g. infrastructure investments, development of coastal zones), precautionary adjustments may be called for to increase the robustness of structures, or to increase the rate of depreciation to allow for earlier replacement. Many of these measures may already have to be considered now, and could be Worthwhile in their own right, independent of climate change considerations.

The economic impact of climate change is usually measured as the extent to which the climate of a given period affects social welfare in that period. This static approach ignores the dynamic effects through which climate change may affect economic growth and hence future welfare. In this paper we take a closer look at these dynamic effects, in particular saving and capital accumulation. With a constant savings rate, a lower output due to climate change will lead to a proportionate reduction in investment which in turn will depress future production (capital accumulation effect) and, in almost all cases, future consumption per capita. If the savings rate is endogenous, forward looking agents would change their savings behavior to accommodate the impact of future climate change. This suppresses growth prospects in absolute and per capita terms (savings effect). In an endogenous growth context, these two effects may be exacerbated through changes in labour productivity and the rate of technical progress. Simulations using a simple climate-economy model suggest that the capital accumulation effect is important, especially if technological change is endogenous, and may be larger than the direct impact of climate change. The savings effect is less pronounced. The dynamic effects are more important, relative to the direct effects, if climate change impacts are moderate overall. This suggests that they are more of a concern in developed countries, which are believed to be less vulnerable to climate change. The magnitude of dynamic effects is not sensitive to the choice of discount rate.

Dual rates of pure time preference, recently introduced for analysing long-term environmental problems, are reinterpreted as shifts in preferences.

We review the explosion of commentary that has followed the release of the Stern Review: The Economics of Climate Change, and agree with most of what has been written. The Review is right when it argues on economic grounds for immediate intervention to reduce emissions of greenhouse gases, but we feel that it is right for the wrong reasons. A persuasive case can be made that climate risks are real and increasingly threatening. If follows that some sort of policy will be required, and the least cost approach necessarily involves starting now. Since policy implemented in 2007 will not "solve" the climate problem, near term interventions can be designed to begin the process by working to avoid locking in high. carbon investments and providing adequate incentives for carbon sequestration. We argue that both objectives can be achieved without undue economic harm in the near term by pricing carbon at something on the order of $15 per ton as long as it is understood that the price will increase persistently and predictably at something like the rate of interest; and we express support for a tax, alternative to the usual cap-and-trade approach.

This paper presents a meta-analysis of forest recreation in Europe based on studies that have applied the travel cost method covering 26 studies in nine countries since 1979. We conduct the meta-regression with an increasing number of variables where level I includes only data available from the studies, level II aggregate socio-economic variables and level III site-specific characteristics such as diversity, fraction of open land and location. Data shows that consumer surplus varies between €0.66 per trip to €112 with a median of €4.52 per trip. Results of the model with the best overall summary indicate that the application of the individual travel cost method, inclusion of opportunity cost of time and average distance travelled lead to increasing benefits whereas the year of the study and estimations from theses and dissertations reduce welfare estimates. Including exogenous variables shows that site attributes, GDP per capita and population density play a significant role.

The nuclear meltdown in Fukushima has given renewed momentum to the anti-nuclear power movement across Europe. However, the degree of momentum varies greatly from country to country, and considering the geographically widespread consequences of a nuclear accident, it hardly appears optimal for one country to ban nuclear power while multiple nuclear power plants are still active in neighbouring countries. Even beyond the nuclear power dilemma, the economic and political externalities associated with energy policy are difficult to overstate. The contributions to this Forum look into the benefi ts expected from a comprehensive common energy policy for Europe and the problems which establishing such a policy would involve.

This paper presents the Climate Framework for Uncertainty, Negotiation and Distribution (FUND), an integrated assessment model of climate change, and discusses selected results. FUND is a nine-region model of the world economy and its interactions with climate, running in time steps of one year from 1990 to 2200. The model consists of scenarios for economy and population, which are perturbed by climate change and greenhouse gas emission reduction policy. Each region optimizes its net present welfare. Policy variables are energy and carbon efficiency improvement, and sequestering carbon dioxide in forests. It is found that reducing conventional air pollution is a major reason to abate carbon dioxide emissions. Climate change is an additional reason to abate emissions. Reducing and changing energy use is preferred as an option over sequestering carbon. Under non-cooperation, free riding as well as assurance behaviour is observed in the model. The scope for joint implementation is limited. Under cooperation, optimal emission abatement is (slightly) higher than under non-cooperation, but the global coalition is not self-enforcing while side payments are insufficient. Optimal emission control under non-cooperation is less than currently discussed under the Framework Convention on Climate Change, but higher than observed in practice.

The paper provides an overview of attempts to represent climate change impact in over twenty integrated assessment models (IAMs) of climate change. Focusing on policy optimization IAMs, the paper critically compares modeling solutions, discusses alternatives and outlines important areas for improvement. Perhaps the most crucial area of improvement concerns the dynamic representation of impact, where more credible functional forms need to be developed to express time-dependent damage as a function of changing socio-economic circumstances, vulnerability, degree of adaptation, and the speed as well as the absolute level of climate change.

The impact of induced technological change (ITC) in energy/climate models on the timing of optimal CO2-abatement depends on whether R&D or learning-by-doing (LBD) is the driving force. Bottom-up energy system models employing LBD suggest strong increases in optimal early abatement. In this paper we extend an existing top-down model supporting this view according to the notion that socio-economic inertia interferes with rapid technological change. We derive analytical results concerning the impact of inertia and ITC on optimal initial abatement and show a wide range of numerical simulations to illustrate magnitudes. Inertia now dominates the timing decision on early abatement, such that LBD might even have a negative effect on early abatement and the impact of R&D is limited. However, ITC still reduces costs of stabilizing atmospheric CO2-concentrations considerably. Copyright

The recent literature discusses optimal paths towards stabilization of atmospheric concentrations of greenhouse gases. The differences in the impact of climate change between alternative scenarios have largely been ignored, however. This paper analyses these differences. Using a selection of plausible, yet speculative, models of climate change impact and a range of sensitivity analyses, it is shown that no stabilization path is unambiguously preferred to its alternative. The ambiguity originates both from the limited scientific knowledge and from ethical choices (eg time discount rate). However, over most of the assumption space explored here, there appears to be a preference for an earlier reduction of greenhouse gas emissions. The best estimate of the additional impact caused by a delay of emission reduction is smaller than the cost savings, but uncertainties are too large to draw this conclusion with any certainty.

The Kyoto Protocol conflicts with a rational view of what short-term climate policy should achieve. Chosen emission reduction targets conflict with individual and social interests, and will therefore be hard to reach. Possibilities to cheat on the agreement are plentiful. Methane emission reduction may help to meet the short-term aims, but does not contribute to the ultimate objective.

Time preferences are a dominant influence in cost-benefit analyses of long-term issues such as climate change. FUND, a model for optimal emission control, is used to spell out this influence. Classic discounting at various rates is contrasted with Heal discounting where the discount factor depends logarithmically on the time distance (it does linearly in the classic case), and Rabl discounting where the discount rate is set to zero at a certain point in the future. The choice of the discount rate has a strong influence on total and short-term emission reduction. The effect of Rabl and Heal discounting is like lowering the classic discount rate. International cooperation has a larger effect on optimal emission reduction, however, than does the discount rate. Larger still is the influence of explicitly taking up long-term goals for atmospheric concentrations in the welfare function, using a modification of the Chichilnisky criterion.

The sale of state assets, both tangible (e.g. commercial firms) and intangible (e.g. radio spectrum), can address budgetary shortfalls. However, drawing on the Irish experience to inform this important issue, it becomes clear that much more is involved in selling state assets in electricity, gas, and transport than ranking such assets by value. Wider public policy considerations need to be taken into account in deciding what to sell and under what conditions. The paper outlines how these wider issues, relating to competition and regulation, can be dealt with so that the sale of state assets will enhance societal welfare.

Integrated Environmental Assessment (IEA) can be loosely defined as policy-relevant, multidisciplinary research on environmental issues. Many, diverse activities in this broad field are ongoing, but the approaches lack the structure, standardization and quality control common in disciplinary research. IEA has three stages: "structuring the problem", "analyzing the problem" and "communicating the findings and insights". Each stage has its inherent difficulties, not least because problem definition and analysis are neither separable nor unambiguous nor unique. Difficulties are exacerbated in the first and third stages by the necessity for science and policy to work together. Difficulties are exacerbated in the second stage by the necessity of different scientific disciplines to cooperate. The European Forum on Integrated Environmental Assessment is an initiative to improve scientific quality and policy-relevance of IEA, by organizing two series of workshops, one looking in detail at current and desired scientific practices, the other reviewing current and establishing further applications of IEA to environmental issues in Europe.

Based on a brief account of 1,000 years of river floods and flood management in the Dutch Rhine delta, it is argued that vulnerability to river floods depends on the complex interaction of economics, institutions, politics and, to a limited extent, climate. Response functions and thresholds for climate change impacts should take this complexity into account rather than assuming society to be constant or evolving in a straightforward manner.

Various aspects of the role of uncertainty in greenhouse gas emission reduction policy are analyzed with the integrated assessment model FUND. FUND couples simple models of economy, climate, climate impacts, and emission abatement. Probability distribution functions are assumed for all major parameters in the model. Monte Carlo analyses are used to study the effects of parametric uncertainties. Uncertainties are found to be large and grow over time. Uncertainties about climate change impacts are more serious than uncertainties about emission reduction costs, so that welfare-maximizing policies are stricter under uncertainty than under certainty. This is more pronounced without than with international cooperation. Whether or not countries cooperate with one another is more important than whether or not uncertainty is considered. Meeting exogenously defined emission targets may be more or less difficult under uncertainty than under certainty, depending on the asymmetry in the uncertainty and the central estimate of interest. The major uncertainty in meeting emissions targets in each of a range of possible future is the timing of starting (serious) reduction policies. In a scenario aiming at a stable CO2 concentration of 550 ppm, the start date varies 20 years for Annex I countries, and much longer for non-Annex countries. Atmospheric stabilization at 550 ppm does not avoid serious risks with regard to climate change impacts. At the long term, it is possible to avoid such risks but only through very strict emission control at high economic costs.

The sensitivity of the optimal control of carbon dioxide emissions to the specification of the social welfare function is systematically explored using the FUND model. Increasing risk aversion emphasises climate change damages relative to emission reduction costs, but at the same time increases the discount rate of consumption. Without international co-operation, the discount rate effect dominates so that optimal control decreases with increasing risk aversion. With international co-operation, optimal control first increases then decreases with increasing risk aversion. Since climate change falls heaviest on the poor, optimal control increases with increasing inequity aversion. Full-fledged intergenerational welfare functions on the one hand emphasise climate change damages but on the other hand place more weight on current, poorer generations. In FUND, the two tendencies almost cancel.

Customary international law has that countries may do each other no harm. A country violates this rule if an activity under its control does damage to another country, and if this is done on purpose or due to carelessness. Impacts of climate change fall under this rule, which is reinforced by many declarations and treaties, including the UNFCCC. Compensation for the harm done depends on many parameters, such as emission scenarios, climate change, climate change impacts and its accounting. The compensation paid by the OECD may run up to 4% of its GDP, far exceeding the costs of climate change to the OECD directly. However, the most crucial issues are, first, from when countries can be held responsible and, second, which emissions are acceptable and which careless. This may even be interpreted such that the countries of the OECD are entitled to compensation, rather than be obliged to pay. State responsibility could substantially change international climate policy.

We rank economics departments in the Republic of Ireland according to the number of publications, number of citations, and successive h-index of research-active staff. We increase the discriminatory power of the h 1-index by introducing three generalizations, each of which is a rational number. The first (h 1+) measures the excess over the actual h-index, while the other two (h 1*, h 1Δ) measures the distance to the next h-index. At the individual level, h*and h Δ coincide while h + is undefined.

The Stern Review reported a social cost of carbon of over $300/tC, calling for ambitious climate policy. We here conduct a systematic sensitivity analysis of this result on two crucial parameters: the rate of pure time preference, and the rate of risk aversion. We show that the social cost of carbon lies anywhere in between 0 and $120 000/tC. However, if we restrict these two parameters to matching observed behaviour, an expected social cost of carbon of $60/tC results. If we correct this estimate for income differences across the world, the social cost of carbon rises to over $200/tC.

An emission intensity protocol to govern long-term international greenhouse gas emission reduction is proposed. The protocol may also be interpreted as a technology protocol. The protocol consists of three parameters: a graduation income, below which countries have no emission reduction obligations; a convergence rate, at which emission intensities should approach that of the most carbon-extensive countries; and an acceleration rate, at which the most carbon-extensive countries should improve their technology over and above the business-as-usual scenario. Depending on the parameter values, emission reduction ranges from draconian to almost nil. The graduation income and acceleration rate have the expected effects. The effect of the convergence rate is strongly scenario-dependent; some scenarios, perhaps unrealistically, assume strong technological convergence in the no-policy case; in other scenarios, adopting 'best commercial technology in the whole world' would lead to substantial emission reduction. Not surprisingly, different regions prefer different parameters in the emission intensity protocol. Adopting the opinion of the median voter, atmospheric concentrations of carbon dioxide in the year 2200 would be reduced from 1650 to 950 ppm. This reduction is relatively robust to changes in crucial model parameters. The costs of complying with the emission intensity protocol can be reduced substantially through international trade in emission permits and, in particular, by banking and borrowing.

The Intergovernmental Panel on Climate Change has a monopoly on the provision of climate policy advice at the international level and a strong market position in national policy advice. This may have been the intention of the founders of the IPCC. I argue that the IPCC has a natural monopoly, as a new entrant would have to invest time and effort over a longer period to perhaps match the reputation, trust, goodwill, and network of the IPCC. The IPCC is a not-for-profit organization, and it is run by nominal volunteers. It therefore cannot engage in the price-gouging that is typical of monopolies. However, the IPCC has certainly taken up tasks outside its mandate. The IPCC has been accused of haughtiness. Innovation is slow. Quality may have declined. And the IPCC may have used its power to hinder competitors. There are all things that monopolies tend to do, against the public interest. The IPCC would perform better if it were regulated by an independent body which audits the IPCC procedures and assesses its performance; if outside organizations would be allowed to bid for the production of reports and the provision of services under the IPCC brand; and if policy makers would encourage potential competitors to the IPCC.

This paper considers the coordination of domestic markets for tradable emission permits where countries determine their own emission reduction targets, using a two-country model. Linking such schemes is beneficial to both countries but may cause the exporting country to decrease its emission reduction target and export more permits. This in turn would not only reduce the costs for both countries as less emissions have to be reduced, but it also lowers the environmental benefits of the importing country. One price instrument (tariff) and two quantity instruments (discount, quota) to prevent the exporting country from issuing more permits are examined. Each instrument restricts trade and alters the terms of trade for the two countries. The importing country (and regulator) prefers an import tariff and an import quota to a carbon discount. If the exporting country releases additional permits, the importing country should not try to keep total emissions constant, as that would be ineffective and maybe even counterproductive. Instead, the importing country should aim to keep the total import constant; this would impose costs on the exporting country that are independent of the policy instrument; an import quota would be the cheapest option for the importing country. An import quota would also stress the idea of supplementary of the flexible mechanism as it increases the share of emissions reduced domestically. Compliance and liability issues constrain the market further. However, both the importing and the exporting country would prefer that the permit seller is liable in case of non-compliance, as sellers' liability would less constrain the market.

We use a model of international and domestic tourist numbers and flows to project tourist numbers and emissions from international tourism out to 2100. We find that between 2005 and 2100 international tourism grows substantially. Not only do people take more trips but these also increase in length. We find that the growth in tourism is mainly fuelled by an increase in trips from Asian countries. Emissions follow this growth pattern until the middle of the century when emissions start to fall due to improvements in fuel efficiency. Projected emissions are also presented for the four SRES scenarios and maintain the same growth pattern but the levels of emissions differ substantially. We find that the projections are sensitive to the period to which the model is calibrated, the assumed rate of improvement in fuel efficiency and the imposed climate policy scenario.

One hundred and three estimates of the marginal damage costs of carbon dioxide emissions were gathered from 28 published studies and combined to form a probability density function. The uncertainty is strongly right-skewed. If all studies are combined, the mode is $2/tC, the median $14/tC, the mean $93/tC, and the 95 percentile $350/tC. Studies with a lower discount rate have higher estimates and much greater uncertainties. Similarly, studies that use equity weighing, have higher estimates and larger uncertainties. Interestingly, studies that are peer-reviewed have lower estimates and smaller uncertainties. Using standard assumptions about discounting and aggregation, the marginal damage costs of carbon dioxide emissions are unlikely to exceed $50/tC, and probably much smaller.

Storms occasionally bring havoc to Northwest Europe. At present, a single storm may cause damage of up to 7 billion U.S.$, of which a substantial part is insured. One scenario of climate change indicates that storm intensity in Northwest Europe could increase by 1-9% because of the doubling of CO2 concentrations in the atmosphere. A geographic-explicit, statistical model, based on recent storms and storm damage data for the Netherlands, shows that an increase of 2% in wind intensity by the year 2015 could lead to a 50% increase in storm damage to houses and businesses. Only 20% of the increase is due to population and economic growth. A 6% increase could even triple the damage. A simpler model - based on national average data and combined with a stochastic storm generator - shows that the average annual damage could increase by 80% with a 2% increase in wind intensity. A 6% wind intensity increase could lead to an average annual damage increase of 500%. The damage in Northwest Europe is about a factor 6 higher than the damage in the Netherlands. Little potential seems to exist for reducing the vulnerability to storms in the Netherlands. More attention should be given to planning at the government level for disaster relief and to the development of coping strategies.

The holiday destination choice is analysed for tourists from 45 countries, representing all continents and all climates. Tourists are deterred by distance, political instability and poverty, and attracted to coasts. Tourists prefer countries with a sunny yet mild climate, shun climates that are too hot or too cold. A country's tourists' aversion for poverty and distance can be predicted by that country's average per capita income. The preferred holiday climate is the same for all tourists, independent of the home climate. However, tourists from hotter climates have more pronounced preferences.

Yohe and Tol (2002. Global Environmental Change 12, 25-40) built an indexing method for vulnerability based on the hypothesis that the adaptive capacity for any system facing a vector of external stresses could be explained by the weakest of its underlying determinants-the so-called "weakest link" hypothesis. Their structure noted eight determinants, but the approach could handle any number. They quoted analogies in support of the hypothesis, but loose inference is hardly sufficient to confirm such a claim. We respond to this omission by offering an empirical investigation of its validity. We estimate a structural form designed to accommodate the full range of possible interactions across sets of underlying determinants. The perfect complement case of the pure "weakest-link" formulation lies on one extreme, and the perfect substitute case where each determinant can compensate for all others at constant rates is the other limiting case. For vulnerability to natural disasters, infant mortality and drinking water treatment, we find qualified support for a modified weakest link hypothesis: the weakest indicator plays an important role because other factors can compensate (with increasing difficulty). For life expectancy, sanitation and nutrition, we find a relationship that is close to linear-the perfect substitute case where the various determinants of adaptive capacity can compensate for each other with relative and persistent ease. Moreover, since the factors from which systems derive their adaptive capacities are different for different risks, we have identified another source of diversity in the assessment of vulnerability.

The Matthew effect has that recognition is bestowed on researchers of already high repute. If recognition is measured by citations, this means that often-cited papers or authors are cited more often. I use the statistical theory of the growth of firms to test whether the fame of papers and authors indeed exhibits increasing returns to scale, and confirm this hypothesis for the 100 most prolific economists.

We use a model of domestic and international tourist numbers and flows to estimate the impact of the EU-US Open Skies agreement that is to take effect in March 2008. The Open Aviation Area will result in increased competition between transatlantic carriers and consequently falls in the cost of flights, therefore we look at the change in visitor numbers from the US into the EU and corresponding CO2 emissions. We find that passenger numbers arriving from the US into the EU will increase by approximately 1% and 14% depending on the magnitude of the price reductions. This increase in passenger numbers does not, however, result in a corresponding rise in emissions as arrivals into other countries from the US fall by a comparable amount. The number of tourist arrivals from the US to countries outside of the EU will fall and overall emissions would then increase by a maximum of 0.7%. If we assume that domestic holidays and foreign holidays are close substitutes, these effects are strengthened and US passengers switch from domestic trips to foreign destinations as airfares converge.

This article surveys the literature on the economic impact of climate change. Different methods have been used to estimate the impact of climate change on human welfare. Studies agree that there are positive and negative impacts. In the short term, positive impacts may dominate, but these are sunk benefits that will obtain regardless of abatement policy. In the longer term, there are net negative impacts. Poorer people tend to be more vulnerable to climate change. Estimated aggregate impacts are not very large, but they are uncertain and incomplete. Estimates of the marginal impacts suggest that greenhouse gas emissions should be taxed and that the emission reduction targets announced by politicians are probably too ambitious. Estimates of the willingness to pay for climate policy suggest that lay people are probably more concerned than experts about the total impact of climate change, whereas lay people and experts agree on estimates of the incremental impact of carbon dioxide emissions.

The h-index is a recent but already quite popular way of measuring research quality and quantity. However, it discounts highly-cited papers. The g-index corrects for this, but it is sensitivity to the number of never-cited papers. Besides, h- or g-index-based rankings have a large number of ties. Therefore, this paper introduces two new indices, and tests their performance for the 100 most prolific economists. A researcher has a t-number (f-number) of t (f) if t (f) is the largest number for which it holds that she has t (f) publications for which the geometric (harmonic) average number of citations is at least t (f). The new indices overcome the shortcomings of the old indices.

The Stern Review added balanced growth equivalents (BGE) to the economic climate change research agenda. We first propose rigorous definitions of the BGE for multiple regions and under uncertainty. We show that the change in the BGE is independent of the assumed scenario of per capita income. For comparable welfare economic assumptions as the Stern Review, we calculate lower changes in BGE between a business as usual scenario and one without climate impacts with the model FUND than the Stern Review found with the model PAGE. We find that mitigation policies give even lower changes in BGE and argue that those policy choices should be the focus of the research effort rather than total damage estimates. According to our results, the current carbon tax should be below 55/tC. Sensitivity analyses show that the Stern Review chose parameters that imply high impact estimates. However, for regionally disaggregated welfare functions, we find changes in BGE that are significantly higher than the results from the Stern Review both for total damage as for policy analysis. With regional disaggregation and high risk aversion, we observe fat tails and with that very high welfare losses.

This paper studies the feasibility of stringent targets for stabilizing ambient greenhouse gas concentrations using the FUND model. 170,000 policy scenarios were run, systematically varying the price of carbon, participation in climate policy, the strength of the climate feedback on the terrestrial carbon cycle, the no policy scenario, and the abatement costs. The results reveal the following. Climate policy has diminishing returns, and there is therefore a maximum to what can be achieved. The success of climate policy is hampered if, as is likely, the terrestrial biosphere turns from a carbon sink to a carbon source because of climate change. All major countries have to reduce their emissions in order to meet the more ambitious stabilization targets. The cost of climate policy would be lower if the stabilization target can be exceeded in the interim. The EU target of 2 °C warming above pre-industrial is infeasible under almost all assumptions. A cost-benefit analysis would endorse a target of 4.5 W m- 2 (but not much stricter than that) if all major emitters engage in abatement. Under the same condition, the median US voter would support a 3.7 W m- 2 target (but not much stricter than that). International permit trade would encourage large developing countries to reduce their emissions, but the trade flows would be substantial relative to product trade and much larger than official development aid.

Non-cooperative game theoretical models of self-enforcing international environmental agreements (IEAs) that employ the cartel stability concept of D'Aspremont et al. (Can J Econ 16:17-25, 1983) frequently assume that countries are identical, and they can sign a single agreement only. We modify the assumption by considering two self-enforcing IEAs and also two types of asymmetric countries. Extending a model of Barrett (Oxford Econ Pap 46:878-894, 1994), we demonstrate that there are similarities between one and two self-enforcing IEAs. But in the case of few countries and high environmental damage we show that two self-enforcing IEA work far better than one self-enforcing IEA in terms of both welfare and environmental quality. Our simulation shows that only if all countries that have fewer benefits and higher cost from pollution abatement must build one coalition, there is hope that two myopic stable coalition can be formed. Moreover, if the cost-benefit functions of pollution abatement impose that the first myopic coalition is formed by countries, which have higher benefits and lower cost from pollution abatement, then two IEA's worsen abatement and welfare in comparison to one IEA. But, if the first myopic coalition is formed by countries, which have smaller benefits and higher cost from pollution abatement, then two IEA's improve abatement and welfare in comparison to one IEA.

This paper estimates the value of short term lost load in the all island electricity market, which includes the Republic of Ireland and Northern Ireland. The value of lost load (VoLL) is the average willingness of electricity consumers to pay to avoid an additional period without power. VoLL is also known as the value of security of electricity supply and is inferred using a production function approach. Detailed electricity use data for the Republic of Ireland allows us to estimate the value of lost load by time of day, time of week and type of user. We find that the value of lost load is highest in the residential sector in both the Republic of Ireland and Northern Ireland. Our results can be used to advise policy decisions in the case of supply outages and to encourage optimum supply security. In the context of this study short term is taken to be a matter of hours rather than days or weeks.

Using a simple model designed for transparency but nonetheless calibrated to support the much-quoted damage estimates of the Stern Review of the Economics of Climate Change, we demonstrate significant sensitivity of those results to assumptions about the pure rate of time preference, the time horizon, and the rates of risk and equity aversion used to compute certainty- and equity-equivalent annuities. Most importantly, we demonstrate enormous sensitivity to presumed constant regional vulnerability and underlying assumptions about adaptive capacity. Manipulation of any of these parameters one at a time across reasonable ranges can diminish damage estimates by as much as 84% or, in the case of extending the time horizon with the Review's low discount rate, increase damage estimates by 900%. We also confirm the usual result that limiting atmospheric concentrations to specific benchmarks above 400 ppm cannot eliminate all damages. Nonetheless, we applaud the Stern Review author team for reconfirming that the climate problem can be approached productively as an economic problem whose solutions can be explored with the tools of decision analysis. © 2008 Elsevier Ltd. All rights reserved.

We construct a model of the stock of private cars in the Republic of Ireland. The model distinguishes cars by fuel, engine size and age. The modelled car stock is built up from a long history of data on sales, and calibrated to recent data on actual stock. We complement the data on the number of cars with data on fuel efficiency and distance driven - which together give fuel use and emissions - and the costs of purchase, ownership and use. We use the model to project the car stock from 2010 to 2025. The following results emerge. The 2009 reform of the vehicle registration and motor tax has led to a dramatic shift from petrol to diesel cars. Fuel efficiency has improved and will improve further as a result, but because diesel cars are heavier, carbon dioxide emissions are reduced but not substantially so. The projected emissions in 2020 are roughly the same as in 2007. In a second set of simulations, we impose the government targets for electrification of transport. As all-electric vehicles are likely to displace small, efficient, and little-driven petrol cars, the effect on carbon dioxide emissions is minimal. We also consider the scrappage scheme, which has little effect as it applies to a small fraction of the car stock only.

We examine the impact of recent tax reforms in Ireland on private car transport and its greenhouse gas emissions. A carbon tax was introduced on fuels, and purchase (vehicle registration) and ownership (motor) taxes were switched from engine size to potential emissions. We use a demographic model of the car stock (by age, size, and fuel) and a car purchase model that reflects the heterogeneous distribution of mileage and usage costs across various engine sizes. The model shows a dramatic shift from petrol to diesel cars, particularly for large engines. The same pattern is observed in the latest data on car sales. This has a substantial impact on tax revenue as car owners shift to the lower tax rates. The tax burden has shifted from car ownership to car use, and that the overall tax burden on private car transport falls. As diesel engines are more fuel efficient than petrol engines, carbon dioxide emissions fall modestly or, if we consider the rebound effect of travel costs on mileage, minimally. From the perspective of the revenue, the costs per tonne of carbon dioxide avoided are (very) high.

We use a model of international and domestic tourist numbers and flows to investigate the effect of various climate policy instruments implemented in Europe on arrivals and emissions for the countries concerned. We find that these schemes do not fulfil their desired effects. The introduction of aviation into the European trading system results in a fall in the number of tourists travelling into the European Union in favour of other destinations. It also causes a significant welfare loss with only a small reduction in emissions. The flight taxes in the Netherlands and the UK result in different substitution effects across destinations (depending on the zones being taxed) but both policies do have the same consequence of inducing global welfare losses and also reducing visitor numbers to the countries. We find that when these policies are combined their effects are additive. Welfare impacts are robust to variations in the underlying assumptions and changes in the scope of the taxes examined have the expected effects.

We use a model of domestic and international tourist numbers and flows to estimate the impact of the recent and proposed changes in the Air Passenger Duty (APD) of the United Kingdom. We look at four different scenarios (abolishing the APD, keeping the 2001 APD level, the 2007 APD and the Conservative Party's "Green Miles" proposal) using base, high and very high elasticity levels as well as assumptions about the substitutability between domestic and international holidays and the effects of a carbon tax. We find that the recent doubling of the APD has the perverse effect of increasing carbon dioxide emissions, albeit only slightly, because it reduces the relative price difference between near and far holidays. Tourists arriving into the UK would fall slightly. The number of tourists travelling from the UK would fall in the countries near to the UK, and this drop would be only partly offset by displaced tourists from the UK. Tourists leaving the UK for countries further a field would increase. The proposal of the Conservative Party to exempt the first 2000 miles (for UK residents) would decrease emissions by roughly the same amount as abolishing the APD altogether-but the number of tourists arriving into the UK would not rise. These results are reversed if we assume that domestic holidays and foreign holidays are close substitutes. If the same revenue were raised with a carbon tax rather than a boarding tax, emissions would fall rather than rise. © 2007 Elsevier Ltd. All rights reserved.

We downscale the results of a global tourism simulation model at a national resolution to a regional resolution. We use this to investigate the impact of climate change on the regions of Germany, Ireland and the UK. Because of climate change, tourists from all three countries would spend more holidays in the home country. In all three countries, climate change would first reduce the number of international arrivals-as Western European international tourist demand falls-but later increase numbers-as tourism demand from increasingly rich tropical countries grows. In Ireland and the UK, the regional pattern of demand shifts is similar to the international one: tourism shifts north. In Germany, the opposite pattern is observed as the continental interior warms faster than the coast: tourism shifts south.

A simulation model of international tourist flows is used to estimate the impact of a carbon tax on aviation fuel. The effect of the tax on travel behaviour is small: A global tax of $1000/t C would change travel behaviour and reduce carbon dioxide emissions from international aviation by 0.8%. A carbon tax on aviation fuel would particularly affect long-haul flights, because of high emissions, and short-haul flights, because of the emission during take-off and landing. Medium distance flights would be affected least. This implies that tourist destinations that rely heavily on short-haul flights or on intercontinental flights will see a decline in international tourism numbers, while other destinations may see international arrivals rise. If the tax is only applied to the European Union, tourists would stay closer to home and European tourism would grow at the expense of other destinations. Sensitivity analyses reveal that the qualitative insights are robust.

A rational, successive g-index is proposed, and applied to economics departments in Ireland. The successive g-index has greater discriminatory power than the successive h-index, and the rational index performs better still. The rational, successive g-index is also more robust to differences in department size.

This paper studies the effects of adaptation and mitigation on the impacts of sea level rise. Without adaptation, the impact of sea level rise would be substantial, almost wiping out entire countries by 2100, although the globally aggregate effect is much smaller. Adaptation would reduce potential impacts by a factor 10-100. Adaptation would come at a minor cost compared to the damage avoided. As adaptation depends on socio-economic status, the rank order of most vulnerable countries is different than the rank order of most exposed countries. Because the momentum of sea level rise is so large, mitigation can reduce impacts only to a limited extent. Stabilising carbon dioxide concentrations at 550 ppm would cut impacts in 2100 by about 10%. However, the costs of emission reduction lower the avoided impacts by up to 25% (average 10%). This is partly due to the reduced availability of resources for adaptation, and partly due to the increased sensitivity to wetland loss by adaptation.

This paper is presented in two parts. The first part demonstrates an environmental input-output model for Ireland for the year 2000. Selected emissions are given a monetary value on the basis of benefit-transfer. This modelling procedure reveals that certain sectors pollute more than others - even when normalised by the sectoral value added. Mining, agriculture, metal production and construction stand out as the dirtiest industries. On average, however, each sector adds more value than it does environmental damage. The second part uses the results of this input-output model - as well as historical data - to forecast emissions, waste and water use out to 2020. The growth in emissions of fluorinated gases and carbon monoxide and the growth of hazardous industrial waste exceed economic growth. Other emissions grow more slowly than the economy. Emissions of acid rain gases (SO2, NOx and NH3) will decrease, even if the economy grows rapidly.

In this paper we examine the distributional effects of Value Added Tax (VAT) in Ireland. Using the 2004/2005 Household Budget Survey, we assess the amount of VAT that households pay as a proportion of weekly disposable income. We measure VAT payments by equivalised income decile, households of different composition and different household sizes. The current system is highly regressive. With the use of a micro-simulation model we also estimate the impact of changing the VAT rate on certain groups of items and the associated change in revenue. We also consider how the imposition of a flat rate across all goods and services would affect households in different categories. The Irish Government has recently announced that it proposes to increase the standard rate of VAT to 22 per cent in 2013 and to 23 per cent in 2014. We examine the distributional implications of such increases. The general pattern of results shows that those hardest hit are households in the first income decile, households in rural areas, 6 person households and households containing a single adult with children.

Climate change may well lead to an increased risk of river floods in the Netherlands. However, the impacts of changes in water management on river floods are larger, either enhancing or reducing flood risks. Therefore, the abilities of water-management authorities to learn that climate and river flows are changing, and to recognize and act upon the implications, are of crucial importance. At the same time, water-management authorities respond to other trends, such as the democratization of decision making, which alter their ability to react to climate change. These complex interactions are illustrated with changes in river flood risk management for the Rhine and the Meuse in the Netherlands over the last 50 years. A scenario study is used to seek insight into the question of whether current water-management institutions and their likely successors are capable of dealing with plausible future flood risks. The scenarios show that new and major infrastructure is needed to keep flood risks at their current level. Such a structural solution to future flood risks is feasible, but requires considerable political will and institutional reform, both for planning and implementation. It is unlikely that reform will be fast enough or the will strong enough.

The view is widely held that proactive integrated management of coastal zones is a rewarding strategy in the long run. It appears, however, rather difficult to substantiate this claim, both theoretically and empirically. Theoretically, first of all because the concepts of 'proactive' and 'integrated' still await their proper definitions and second, because the role of seemingly important variables and their interactions is not well understood, including the discount rate, the process of technological development and decision making under uncertainty. In addition, extensive empirical information is needed on the positive and negative external effects, their costs and benefits in time, as well as tile investments and operational costs of coastal zone management strategies, whether integrated or not Resolving these issues is beyond the scope of this paper, which merely attempts to highlight some of the relevant aspects and to provide some theoretical argumentation and conditions in favour of proactive integrated coastal zone management. This argumentation concerns external effects, economics of scale, the discount rate, the precautionary principle and the question 'learn or act?' with regard to decision making under uncertainty.

The effort to conserve fisheries resources and improve the welfare of small-scale fishing households is an important objective of poverty reduction strategies in Tanzania. The success of such strategies depends on both the diversity and the level of efficiency within small-scale fishing households. This paper examines the technical efficiency of Tanzanian small-scale fishing households, based on data from two coastal villages located near Bagamoyo and Zanzibar, using a stochastic frontier model with technical inefficiency. The estimated mean technical efficiency of small-scale fishing households was 52%, showing that they were operating far below optimum efficiency. The efficiency of individual fishing households was positively associated with fishing experience, size of farming land, distance to the fishing ground and potential market integration; it was negatively related to non-farm employment and bigger household sizes. Future policies aimed at conservation and development in fishing communities should provide mechanisms that improve the access of small-scale fishing households to less-destructive fishing tools (via the provision of credit facilities) and to markets, as well as the creation of new employment opportunities in other sectors. In addition, measures which check the use of illegal fishing gear, overcapitalisation and open-access problems should be considered.

Neither the costs nor the benefits of adaptation to climate change have been systematically studied so far. This paper discusses the extent to which the vast body of literature on climate change impacts can provide insights into the scope and likely cost of adaptation. The ways in which the impacts literature deals with adaptation can be grouped into four categories: no adaptation, arbitrary adaptation, observed adaptation (analogues), and modeled adaptation (optimization). All four cases are characterized by the simple assumptions made about the mechanisms of adaptation. No or only scant attention is paid to the process of adapting to a new climate. Adaptation analysis has to acknowledge that people will be neither dumb nor brilliant at adapting. They are likely to see the need for change, but may be constrained in their ability to adept or in their comprehension of the permanence and direction of change.

The initial gaps between economics-oriented top-down models of the costs of emission reduction and technology-oriented bottom-up models have largely disappeared. The energy efficiency paradox - the hypothesis that it would be possible to abate greenhouse gas emissions and save money - is now partly explained and partly further investigated with the appropriate economic and behavioural research tools. New hybrid models include enough technological detail and are therefore quite realistic. Current research focuses on technological development. One strain of analysis relies on highly aggregate and stylized economic methods, while another on highly disaggregated detailed engineering methods. Both approaches need to pay more attention to distribution and welfare issues and to policy instruments, and need to be better embedded in their context and in empirical research.

Adaptation is defined as the planned or unplanned, reactive or anticipatory, successful or unsuccessful response of a system to a change in its environment. This paper examines the current status of adaptation to sea-level rise and climate change in the context of European coasts. Adaptation can greatly reduce the impact of sea-level rise (and other coastal changes), although it requires adjustment of coastal management policies to changing circumstances. Consequently, adaptation is a social, political, and economic process, rather than just a technical exercise, as it is often conceived. The Synthesis and Upscaling of sea-level Rise Vulnerability Assessment Studies project has shown that adaptation to sea-level rise is widely divergent among European countries. Crudely, four groups of countries were identified: 1. Those that do not worry about accelerated sea-level rise and should not as their coasts are not susceptible 2. Those that do not worry as they have more urgent problems 3. Those that do not worry but probably should 4. Those that do worry and have started to adapt At the European Union level, while coastal management is a focus, this effort is mainly targeted at today's problems. Hence, this paper suggests the need for a concerted effort to address adaptation in coastal zones across Europe. Sharing of experience among countries would facilitate this process.

There are sound arguments for postponing aggressive emission reduction, such as cost savings, characteristics of the carbon cycle, and international institution building. There are equally sound arguments against postponing ambitious emission abatement, such as the stimulation of technological progress, intergenerational equity, and the impacts of climate change. The current state of knowledge does not allow for an unambiguous preference of one option over the other. However, there is little reason for not reducing emissions, not developing new technologies, and not building international institutions.

Estimates of the marginal damage costs of carbon dioxide emissions suggest that, although climate change is a problem and some emission reduction is justified, very stringent abatement does not pass the cost-benefit test. However, current estimates of the economic impact of climate change are incomplete. Some of the missing impacts are likely to be positive and others negative, but overall the uncertainty seems to concentrate on the downside risks and current estimates of the damage costs may have a negative bias. The research effort on the economic impacts of climate change is minute and lacks diversity. This field of study should be strengthened, with a particular focus on the quantification of uncertainties; estimating missing impacts, estimating impacts in developing countries; interactions between impacts and higher-order effects; the valuation of biodiversity loss; the implications of extreme climate scenarios and violent conflict; and climate change in the very long term. I discuss these particular gaps in research, and speculate on possible sign and size of the impacts of climate change.

Estimates of the marginal costs of greenhouse gas emissions are an important input to the decision how much society would want to spend on greenhouse gas emission reduction. Marginal cost estimates in the literature range between $5 and $25 per tonne of carbon. Using similar assumptions, the FUND model finds marginal costs of $9-23/tC, depending on the discount rate. If the aggregation of impacts over countries accounts for inequalities in income distribution or for risk aversion, marginal costs would rise by about a factor of 3. Marginal costs per region are an order of magnitude smaller than global marginal costs. The ratios between the marginal costs of CO2 and those of CH4 and N2O are roughly equal to the global warming potentials of these gases. The uncertainty about the marginal costs is large and right-skewed. Tlte expected value of the marginal costs lies about 35% above the best guess, the 95-percentile about 250%.

Water is scarce in many countries. One instrument for improving the allocation of a scarce resource is (efficient) pricing or taxation. However, water is implicitly traded on international markets, particularly through food and textiles, so that the impacts of water taxes cannot be studied in isolation, but require an analysis of international trade implications. We include water as a production factor in a multi-region, multi-sector computable general equilibrium model (GTAP), to assess a series of water tax policies. We find that water taxes reduce water use and lead to shifts in production, consumption and international trade patterns. Countries that do not levy water taxes are nonetheless affected by other countries' taxes. Taxes on agricultural water use drive most of the economic and welfare impacts. Reductions in water use (welfare losses) are less (more) than linear with the price of water. The results are sensitive to the assumed ability to substitute other production factors for water. A water tax on production would have different effects on water use, production and trade patterns and the size and distribution of welfare losses than would a water tax on final consumption. © IWA Publishing 2008.

Global climate change will increase outdoor and indoor heat loads, and may impair health and productivity for millions of working people. This study applies physiological evidence about effects of heat, climate guidelines for safe work environments, climate modeling, and global distributions of working populations to estimate the impact of 2 climate scenarios on future labor productivity. In most regions, climate change will decrease labor productivity, under the simple assumption of no specific adaptation. By the 2080s, the greatest absolute losses of population-based labor work capacity (in the range 11% to 27%) are seen under the A2 scenario in Southeast Asia, Andean and Central America, and the Caribbean. Increased occupational heat exposure due to climate change may significantly impact on labor productivity and costs unless preventive measures are implemented. Workers may need to work longer hours, or more workers may be required, to achieve the same output and there will be economic costs of lost production and/or occupational health interventions against heat exposures.

We study the effects of carbon tax and revenue recycling across the income distribution in the Republic of Ireland. In absolute terms, a carbon tax of €20/tCO2 would cost the poorest households less than €3/week and the richest households more than €4/week. A carbon tax is regressive, therefore. However, if the tax revenue is used to increase social benefits and tax credits, households across the income distribution can be made better off without exhausting the total carbon tax revenue.

The High Aswan Dam converted a variable and uncertain flow of Nile river water into a predictable and controllable water supply stored in Lake Nasser. We use a computable general equilibrium model of the Egyptian economy to estimate the economic impact of the High Aswan Dam. We compare the actual 1997 economy to the 1997 economy as it would have been if historical pre-dam Nile flows (drawn from a 72 year portrait) had applied (i.e., the Dam had not been built). The steady water supply sustained by the High Aswan Dam increased transport productivity, and year round availability of predictable and adequate water sustained a shift towards more valuable summer crops. These static effects are worth EGP 4.9 billion. Investments in transport and agriculture increased as a consequence; these investments, assuming that Egypt is a small open economy, added another EGP 1.1 billion to the value of the Dam. The risk premium on the reduced variability is estimated to be EGP 1.1 billion for a modest risk aversion, and perhaps EGP 4.4 billion for a high risk aversion. The total gain of EGP 7.1 billion to 10.3 EGP billion equals 2.7% to 4.0% of annual GDP in 1997.

Using the FUND model, an impact assessment is conducted over the 21st century for rises in sea level of up to 2-m/century and a range of socio-economic scenarios downscaled to the national level, including the four SRES (IPCC Special Report on Emissions Scenarios) storylines. Unlike a traditional impact assessment, this analysis considers impacts after balancing the costs of retreat with the costs of protection, including the effects of coastal squeeze. While the costs of sea-level rise increase with greater rise due to growing damage and protection costs, the model suggests that an optimum response in a benefit-cost sense remains widespread protection of developed coastal areas, as identified in earlier analyses. The socio-economic scenarios are also important in terms of influencing these costs. In terms of the four components of costs considered in FUND, protection dominates, with substantial costs from wetland loss under some scenarios. The regional distribution of costs shows that a few regions experience most of the costs, especially East Asia, North America, Europe and South Asia. Importantly, this analysis suggests that protection is much more likely and rational than is widely assumed, even with a large rise in sea level. This is underpinned by the strong economic growth in all the SRES scenarios: without this growth, the benefits of protection are significantly reduced. It should also be noted that some important limitations to the analysis are discussed, which collectively suggest that protection may not be as widespread as suggested in the FUND results.

The South African government is exploring ways to address water scarcity problems by introducing a water resource management charge on the quantity of water used in sectors such as irrigated agriculture, mining, and forestry. It is expected that a more efficient water allocation, lower use, and a positive impact on poverty can be achieved. This paper reports on the validity of these claims by applying a computable general equilibrium model to analyze the triple dividend of water consumption charges in South Africa: reduced water use, more rapid economic growth, and a more equal income distribution. It is shown that an appropriate budget-neutral combination of water charges, particularly on irrigated agriculture and coal mining, and reduced indirect taxes, particularly on food, would yield triple dividends, that is, less water use, more growth, and less poverty.

Water problems are typically studied at the level of the river catchment. About 70% of all water is used for agriculture, and agricultural products are traded internationally. A full understanding of water use is impossible without understanding the international market for food and related products, such as textiles. The water embedded in commodities is called virtual water. Based on a general equilibrium model, we offer a method for investigating the role of water resources and water scarcity in the context of international trade. We run five alternative scenarios, analyzing the effects of water scarcity due to reduced availability of groundwater. This can be a consequence of physical constraints, and of policies curbing water demand. Four scenarios are based on a "market solution", where water owners can capitalize their water rent or taxes are recycled. In the fifth "non-market" scenario, this is not the case; supply restrictions imply productivity losses. Restrictions in water supply would shift trade patterns of agriculture and virtual water. These shifts are larger if the restriction is larger, and if the use of water in production is more rigid. Welfare losses are substantially larger in the non-market situation. Water-constrained agricultural producers lose, but unconstrained agricultural produces gain; industry gains as well. As a result, there are regional winners and losers from water supply constraints. Because of the current distortions of agricultural markets, water supply constraints could improve allocative efficiency; this welfare gain may more than offset the welfare losses due to the resource constraint.

Increasing water scarcity combined with an increasing demand for food and water for irrigation call for a careful revision of water use in agriculture. Currently, less than 60% of all the water used for irrigation is effectively used by crops. Based on the new version of the GTAP-W model we analyze the effect of potential water savings and the welfare implications of improvements in irrigation efficiency worldwide. The results show that a water policy directed to improve irrigation efficiency led to global and regional water savings, but it is not beneficial for all regions. The final effect on regional welfare will depend on the interaction of several different causes. For instance, higher irrigation efficiency changes opportunity costs and reverses comparative advantages, modifying regional trade patterns and welfare. For water-stressed regions the effects on welfare are mostly positive. For nonwater scarce regions the results are more mixed and mostly negative. The results show that exports of virtual water are not exclusive of water abundant regions.

Agriculture is the largest consumer of freshwater resources - around 70 percent of all freshwater withdrawals are used for food production. These agricultural products are traded internationally. A full understanding of water use is, therefore, impossible without understanding the international market for food and related products, such as textiles. Based on the global general equilibrium model GTAP-W, we offer a method for investigating the role of green (rain) and blue (irrigation) water resources in agriculture and within the context of international trade. We use future projections of allowable water withdrawals for surface water and groundwater to define two alternative water management scenarios. The first scenario explores a deterioration of current trends and policies in the water sector (water crisis scenario). The second scenario assumes an improvement in policies and trends in the water sector and eliminates groundwater overdraft world-wide, increasing water allocation for the environment (sustainable water use scenario). In both scenarios, welfare gains or losses are not only associated with changes in agricultural water consumption. Under the water crisis scenario, welfare not only rises for regions where water consumption increases (China, South East Asia and the USA). Welfare gains are considerable for Japan and South Korea, Southeast Asia and Western Europe as well. These regions benefit from higher levels of irrigated production and lower food prices. Alternatively, under the sustainable water use scenario, welfare losses not only affect regions where overdrafting is occurring. Welfare decreases in other regions as well. These results indicate that, for water use, there is a clear trade-off between economic welfare and environmental sustainability.

This paper studies the economic implications of climate-change-induced variations in tourism demand, using a world CGE model. The model is first re-calibrated at some future years, obtaining hypothetical benchmark equilibria, which are subsequently perturbed by shocks, simulating the effects of climate change. We portray the impact of climate change on tourism by means of two sets of shocks, occurring simultaneously. The first set of shocks translate predicted variations in tourist flows into changes of consumption preferences for domestically produced goods. The second set reallocate income across world regions, simulating the effect of higher or lower tourists' expenditure. Our analysis highlights that variations in tourist flows will affect regional economies in a way that is directly related to the sign and magnitude of flow variations. At a global scale, climate change will ultimately lead to a welfare loss, unevenly spread across regions. © 2005 Elsevier Ltd. All rights reserved.

A coherent approach to structuring reference units for coastal vulnerability analysis is often required for large-scale analyses of the coastal system. However, a review of existing spatial reference frameworks within vulnerability analyses demonstrates that our use of coastal space within large-scale models remains relatively poor. This paper examines a series of challenges to spatial modeling that have emerged from the development of a national to global impact tool, DIVA (Dynamic Interactive Vulnerability Assessment). The paper addresses how best to utilize the limited data to develop a reference framework for modeling vulnerability within the global coastal environment. It outlines the approach to spatial modeling that has been developed for use within the DIVA tool: segmenting the coastal zone into a series of relatively homogenous reference units at the scale of DIVA, based on the behavior of the physical, social, and economic systems within the zone. The importance of effective spatially defined models is emphasized within the paper. Encouraging greater spatial recognition and definition of the behavioral environment of the coast is critical to modeling space within the coastal system. By decreasing spatial uncertainties in the creation of reference units for vulnerability analysis, the accuracy of modeling within large-scale coastal environments can be further improved.

In this paper, the global agricultural land use model Kleines Land Use Model is coupled to an extended version of the computable general equilibrium model (CGE) Global Trade Analysis Project in order to consistently assess the integrated impacts of climate change on global cropland allocation and its implication for economic development. The methodology is innovative as it introduces dynamic economic land-use decisions based also on the biophysical aspects of land into a state-of-the-art CGE; it further allows the projection of resulting changes in cropland patterns on a spatially more explicit level. A convergence test and illustrative future simulations underpin the robustness and potentials of the coupled system. Reference simulations with the uncoupled models emphasise the impact and relevance of the coupling; the results of coupled and uncoupled simulations can differ by several hundred percent.

Existing environmental accounts for the Republic of Ireland are at the national level. This is fine for continental and global environmental problems, but information at a finer spatial scale is needed for local environmental problems. Furthermore, the impact of environmental policy may differ across space. We therefore construct regional estimates of the environmental pressures posed by Irish households and the environmental problems faced by them. The basic unit of analysis is the electoral district, and the prime data source is the CSO's Small Area Statistics, a product of the Census. We use the results of classifying regressions of the Household Budget Survey to impute domestic energy use. We use engineering relations to impute transport fuel use, and secondary data on household behaviour to impute waste arisings. We use EPA data on drinking water use and quality by county. The results show marked regional differences. Electricity use and waste arisings are higher in the East and in the cities and towns. Transport fuel use is highest in the commuter belts around the cities and towns. Other energy is relatively uniform. There is no clear pattern in estimated drinking water use, which may be due to data quality. Drinking water quality is poor across much of the country, but different counties suffer from different problems. The regional estimates are constructed using data in the public domain. However, various government agencies hold data that would allow for the construction of more detailed, more accurate, and more extensive regional environmental accounts.

A new global coastal database has been developed within the context of the DINAS-COAST project. The database covers the world's coasts, excluding Antarctica, and includes information on more than 80 physical, ecological, and socioeconomic parameters of the coastal zone. The database provides the base data for the Dynamic Interactive Vulnerability Assessment modelling tool that the DINAS-COAST project has produced. In order to comply with the requirements of the modelling tool, it is based on a data model in which all information is referenced to more than 12,000 linear coastal segments of variable length. For efficiency of data storage, six other geographic features (administrative units, countries, rivers, tidal basins or estuaries, world heritage sites, and climate grid cells) are used to reference some data, but all are linked to the linear segment structure. This fundamental linear data structure is unique for a global database and represents an efficient solution to the problem of representing and storing coastal data. The database has been specifically designed to support impact and vulnerability analysis to sea-level rise at a range of scales up to global. Due to the structure, consistency, user-friendliness, and wealth of information in the database, it has potential wider application to analysis and modelling of the world's coasts, especially at regional to global scales.

This article assesses a wide range of alternative proposals for post-2012 international climate policy regimes. We believe that these proposals will serve as a basis for debates about how to configure post-2012 climate policy. The article characterizes and assesses the policy proposals along the lines of five key policy dilemmas. We argue that (1) many proposals have ideas on how to reduce emissions, but fewer have a solution on how to stimulate technical innovation; (2) many proposals formulate climate policy in isolation, while there are fewer proposals that try to mainstream climate policies in other policy areas; (3) many proposals advocate market-based solutions, while fewer realize that there are certain drawbacks to this solution especially at the international level; (4) most proposals have a preference for a UN-based regime, while a more fragmented regime, based on regional and sectoral arrangements may be emerging; and (5) most proposals have ideas about mitigation, but not many have creative ideas on how to integrate mitigation with adaptation. © 2008 Earthscan.

The areas of energy, water and food policy have numerous interwoven concerns ranging from ensuring access to services, to environmental impacts to price volatility. These issues manifest in very different ways in each of the three "spheres", but often the impacts are closely related. Identifying these interrelationships a priori is of great importance to help target synergies and avoid potential tensions. Systems thinking is required to address such a wide swath of possible topics. This paper briefly describes some of the linkages at a high-level of aggregation - primarily from a developing country perspective - and via case studies, to arrive at some promising directions for addressing the nexus. To that end, we also present the attributes of a modelling framework that specifically addresses the nexus, and can thus serve to inform more effective national policies and regulations. While environmental issues are normally the 'cohesive principle' from which the three areas are considered jointly, the enormous inequalities arising from a lack of access suggest that economic and security-related issues may be stronger motivators of change. Finally, consideration of the complex interactions will require new institutional capacity both in industrialised and developing countries. © 2011 Elsevier Ltd.

The range of future climate-induced sea-level rise remains highly uncertain with continued concern that large increases in the twenty-first century cannot be ruled out. The biggest source of uncertainty is the response of the large ice sheets of Greenland and west Antarctica. Based on our analysis, a pragmatic estimate of sea-level rise by 2100, for a temperature rise of 4° C or more over the same time frame, is between 0.5 m and 2 m- the probability of rises at the high end is judged to be very low, but of unquantifiable probability. However, if realized, an indicative analysis shows that the impact potential is severe, with the real risk of the forced displacement of up to 187 million people over the century (up to 2.4% of global population). This is potentially avoidable by widespread upgrade of protection, albeit rather costly with up to 0.02 per cent of global domestic product needed, and much higher in certain nations. The likelihood of protection being successfully implemented varies between regions, and is lowest in small islands, Africa and parts of Asia, and hence these regions are the most likely to see coastal abandonment. To respond to these challenges, a multi-track approach is required, which would also be appropriate if a temperature rise of less than 4° C was expected. Firstly, we should monitor sea level to detect any significant accelerations in the rate of rise in a timely manner. Secondly, we need to improve our understanding of the climate-induced processes that could contribute to rapid sea-level rise, especially the role of the two major ice sheets, to produce better models that quantify the likely future rise more precisely. Finally, responses need to be carefully considered via a combination of climate mitigation to reduce the rise and adaptation for the residual rise in sea level. In particular, long-term strategic adaptation plans for the full range of possible sea-level rise (and other change) need to be widely developed. © 2011 The Royal Society.

Economic cost-benefit analysis of the costs of greenhouse gas emission abatement and climate change often points towards limited abatement. This note elucidates one reason why this result is obtained: the way in which the intangible damages are treated and the utility function is specified. On the basis of the DICE model, it is shown that by putting the intangible damages directly into the utility function, and by assuming them to grow with per capita income, the optimal reduction increases, and in the second case more than triples, compared to Nordhaus's original results.

It is argued that the predictability of meteorological variables is not constant but shows regular variations. This is shown for the daily mean summer and winter temperatures at De Bilt, The Netherlands, over the last 30 years. To capture this feature, a generalized autoregressive conditional heteroscedastic (GARCH) model is proposed. In this model, the conditional variance of an observation depends linearly on the conditional variances of the previous observations and on the previous prediction errors. Here a GARCH(1,1) model is used for both the conditional variance and the conditional standard deviation, in conjunction with an AR(2) model for the mean, and conditionally normal errors. It is shown that these heteroscedastic models outperform their homoscedastic versions, and that the model which updates the conditional standard deviation is preferred.

It is argued that estimating the damage costs of a certain benchmark climate change is not sufficient. What is needed are cost functions and confidence intervals. Although these
are contained in the integrated models and their technical manuals, this paper brings them into the open in order to stimulate discussion. After briefly reviewing the benchmark climate change damage costs, region-specific cost functions are presented which distinguish tangible from intangible losses and the losses due to a changing climate from those due to a changed climate.
Furthermore, cost functions are assumed to be quadratic, as an approximation of the unknown but presumably convex functions. Results from the damage module of the integrated climate economy model FUND are presented, Next, uncertainties are incorporated and expected damages
are calculated. It is shown that because of convex loss functions and right-skewed uncertainties, the risk premium is substantial, calling for more action than analysis based on best-guess estimates. The final section explores some needs for further scientific research.