AMBIO
A JOURNAL OF THE HUMAN ENVIRONMENT
VOLUME XXXV NUMBER 6, SEPTEMBER 2006
The economics of greenhouse gases advocates that mankind
should minimize the total social cost of climate change and
equate the marginal cost of abatement to the present value of
the marginal damages. As greenhouse gases accumulate,
temperatures warm, and damages increase, abatement should
increase as well. But how much abatement is justified over time
given the magnitude of expected damages from climate change?
We now know a lot more about the impacts of climate
change than we did a few decades ago. The literature has
quantified ‘‘market impacts’’ to agriculture, forestry, energy,
water, and coasts. ‘‘Non-market impacts’’ to coasts, ecosystems,
and human health have also been identified. In this essay, I will
focus on market impacts but many of the qualitative insights
apply to non-market impacts as well.
Impacts have been valued primarily by using either
experimental-simulation modeling or cross-sectional analysis.
These studies suggest that the welfare of farms, homes, and
firms tend to have a hill-shaped relationship with temperature.
This hill-shape implies that small amounts of warming are good
for subjects currently on the cool side and bad for subjects
currently on the warm side of the optimum. The impacts of
climate change will vary from being beneficial to harmful
depending on current climate conditions.
More recent research has also shown that people will adapt to
climate change and change their behavior. Farms will switch
crops and livestock, households will switch fuels towards
electricity and invest in cooling, and forest owners will expand
intensive plantations and shift species. Governments also have
a role to play in adaptation, for example, by reallocating water or
raising fortified structures along valuable coasts.
When adaptation is included, impact studies imply that
climate changes over the next 50 years will have very small net
impacts because expected agricultural and forestry benefits will
offset expected energy, coastal, and water damages. The present
value of damages to the global economy from an emission of
carbon today is small. These results justify only modest
Editorial
273
Degradation of Littoral Habitats by Residential Development:
Woody Debris in Lakes of the Pacific Northwest and Midwest,
United States
Tessa B. Francis and Daniel E. Schindler
274–280
Global Invasive Potential of 10 Parasitic Witchweeds and
Related Orobanchaceae
Kamal I. Mohamed, Monica Papes, Richard Williams,
Brett W. Benz and A. Townsend Peterson
281–288
The Economic Impact of Sea-level Rise on Nonmarket Lands
in Singapore
Wei-Shiuen Ng and Robert Mendelsohn
289–296
Assessing the Risk of Impact of Farming Intensification on
Calcareous Grasslands in Europe: A Quantitative Implementation of the MIRABEL Framework
Sandrine Petit and Berien Elbersen
297–303
abatement efforts over the next few decades. As greenhouse
gases accumulate, the present value of damages will rise, and
more aggressive policies in the future may be warranted.
How aggressive these future policies should be will depend on
how much climate changes. The current scientific consensus is
that unabated warming will range from 1.48C to 5.88C by 2100.
If warming falls near the lower end of this range, the benefits and
damages from warming will offset each other and there will be
little incentive to abate this century. If warming reaches towards
the higher end of this range, however, the impacts will be much
larger and society should aggressively abate in the future.
Recent research into impacts in Africa also suggests that
there is an important equity issue not addressed by abatement.
Farms that are already hot (in low latitude countries) will suffer
large reductions in net revenue from climate change (1). Low
latitude countries will likely bear the biggest brunt of climate
change damages (2). In contrast, mid-high latitude farms are
expected to benefit. Low latitude economies heavily depend on
agriculture and the people are amongst the poorest in the world.
The bulk of greenhouse gas emissions will come from relatively
wealthy countries, but the bulk of victims will be relatively
poor. The world should consider a compensation package for
low latitude countries for future damages. For example, the
world could help these poor countries develop their economies
away from climate sensitive agriculture.
References
1. Kurukulasuriya, P., Mendelsohn, R., Hassan, R., Benhin, J., Diop, M., Eid, H. M.,
Fosu, K. Y., Gbetibouo, G., Jain, S., Mahamadou, A., El-Marsafawy, S., Ouda, S.,
Ouedraogo, M., SPne, I.,Seo, N., Maddison, D., and Dinar A. 2006. Will African
Agriculture Survive Climate Change? World Bank Economic Review (in press).
2. Mendelsohn, R., Dinar, A., and Williams, L. 2006. The Distributional Impact of Climate
Change On Rich and Poor Countries. Environment and Development Economics 11, 1 –20.
Guest Editor
Professor Robert Mendelsohn
Yale School of Forestry and Environmental Studies
SYNOPSES
River Hydrology and the North Atlantic Oscillation:
A General Review
Joanna Pociask-Karteczka
312–314
Megacryometeors: Distribution on Earth and Current Research
Jesus Martinez-Frias and Antonio Delgado Huertas
314–316
Ecological Economic Problems and Development Patterns of
the Arid Inland River Basin in Northwest China
Lihua Zhou and Guojing Yang
316–318
Hydrological Indicators or Desertification in the Heihe River
Basin of Arid Northwest China
Qi Shanzhong and Luo Fang
319–321
Growing Need for a Global Environmental Specimen Banking
Network
Jarkko Utriainen
322–323
International River Basin Management under the EU Water
Framework Directive: An Assessment of Cooperation and
Water Quality in the Baltic Sea Drainage Basin
Susanna Nilsson and Sindre Langaas
304–311
Ambio Vol. 35, No. 6, September 2006
Ó Royal Swedish Academy of Sciences 2006
http://www.ambio.kva.se
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