CLIMATE CHANGE

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CLIMATE CHANGE

• What is Going On?

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Variations of the Earths surface temperature
for the past 1,000 years
SPM 1b
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Variations of the Earths surface temperature
for the past 140 years
SPM 1a
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U.S. DEVIATIONS FROM NORMAL
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GLOBAL DEVIATIONS FROM NORMAL
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The oceans play an important role in global
climate

• The dominant aspect here is the conveyor belt.
• This is the system of water movement in the
  oceans.

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Global ocean circulation
Cooling
Warm surface current
Intermediate waters
Warm and less saline
Antarctic circumpolar current
A simplified view of the global thermohaline
conveyor belt, showing cooling and downwelling in
the North Atlantic, warming and freshening in the
southern hemisphere, and return flow as a warm
surface current.
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The El Nino (the 1997/98 El Niño was the
strongest on record)
BW 14
As shown by changes in sea-surface temperature
(relative to the 1961-1990 average) for the
eastern tropical Pacific off Peru
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The Greenhouse Effect is a product of increased
levels of carbon dioxide (CO2) and nitrous oxide
(N20). Methane (CH4) is a problem as well.

• All three of these gases show enormous
  increases over the recent past.
• The concentrations of these gasses trap solar
  radiation inside the earths atmospheric and thus
  do not let the heat escape. And so surface
  temperatures rise.

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TIME TREND IN ATMOSPHERIC CARBON DIOXIDE
CONCENTRATIONS
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The Greenhouse Effect

• Solar radiation

Long-wave radiation
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Where do these greenhouse gasses come from?

• As with fuel use we categorize them by
  commercial, industrial, residential, and
  transportation.
• And the most important greenhouse gas is carbon
  dioxide.

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INDEXED CARBON DIOXIDE EMISSIONS BY SOURCE
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GDP AND CARBON DIOXIDE
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Climate change policy is geared to limiting
greenhouse gas emissions so as to stabilize the
impacts on climate change.

• The famous Kyoto Protocol (there is that
  word--protocol) was designed to convince
  countries to reduce their emissions of greenhouse
  gasses. It is named after the historic capital
  of Japan (Kyoto) where an important meeting
  occurred among all of the countries under the
  auspices of the United Nations Framework
  Convention on Climate Change.
• You can read itthough you do not have toat the
  link http//unfccc.int/resource/docs/convkp/kpe
  ng.html

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The Bush Administration thumbed its nose at the
rest of the world and refused to participate in
further discussions on global warming.

• The suspicion, of course, is that this is
  precisely what one would expect from an
  administration with such tight relations with the
  energy sector.
• Consider the following data from the Center for
  Responsive Politics.
• http//www.opensecrets.org/pressreleases/energybr
  iefing.htm

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A General www site on money in politics is

• http//www.opensecrets.org/
• The energy industry data come from a subset of
  this site.

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THE OIL AND GAS INDUSTRY
Note that 78 cents out of every dollar the
industry has contributed to federal parties and
candidates over the last decade has gone to the
GOP -- President Bush was the No. 1 recipient of
the industrys money during the last election
Bush, with more than 1.8 million in
contributions, got more money from the industry
during 1999-2000 than any other federal candidate
over the last decade, barely eclipsing two fellow
Texans in the process. Sen. Phil Gramm (R) is the
No. 2 recipient of oil money since 1989, with
1.6 million from industry PACs and individuals,
while his oil patch colleague Sen. Kay Bailey
Hutchison (R) ranks second with 1.3 million.
Texas-based companies dominate the industrys
giving. The most generous the Houston-based
Enron, the industrys No. 1 contributor during
1999-2000 with more than 2.3 million in
contributions, about 1 million more than No. 2
ranked Exxon-Mobil. From THE CENTER FOR
RESPONSIVE POLITICS http//www.opensecrets.org/pr
essreleases/energybriefing.htm
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Electric Utilities

• Electric utilities can spot an ally when they
  see one. The electricity industry heavily favored
  George W. Bush over Al Gore in last years
  presidential election, giving almost 7 to the
  Texas governor for every 1 they gave to the vice
  president. All told, Bush collected more than
  447,000 in PAC and individual contributions from
  electric utilities, compared to just 65,000 for
  Gore. In fact, Bushs two-year fund-raising total
  exceeds the cumulative amount that any other
  federal candidate has received from electric
  utilities over the last 10 years. From THE
  CENTER FOR RESPONSIVE POLITICS
  http//www.opensecrets.org/pressreleases/energybri
  efing.htm

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And What About the Coal Industry?

• Few industries wagered more heavily on
  Republicans during the last elections than coal
  mining, which handed over 88 cents out of every
  campaign dollar it contributed to the GOP during
  1999-2000. Its 3.7 million in total giving was
  almost three times what the coal industry had
  given during 1995-96, the previous presidential
  cycle. No doubt, some of that generosity had
  something with George W. Bush, who was the
  industrys top recipient with just over 110,000
  in contributions. Yet the industrys jump in
  giving last year can be credited more to its
  stepped-up soft money contributions. Coal mining
  interests anted up almost 2 million worth of
  soft money checks during the last elections,
  three-quarters of which went to Republicans.
  Thats three times what the industry gave during
  1995-96, when its soft money giving amounted to
  just over 324,000. From THE CENTER FOR
  RESPONSIVE POLITICS
• http//www.opensecrets.org/pressreleases/energy
  briefing.htm

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And Nuclear Power

• The nuclear power industry was a generous
  contributor to federal parties and candidates
  during the 2000 elections. The Southern Co,
  Entergy and other companies that boast
  significant nuclear power divisionsas well as
  industry trade associations like the Nuclear
  Energy Institutecontributed roughly 13.6
  million in soft money, PAC and individual
  contributions to federal parties and candidates
  during the last elections. More than two-thirds
  of that money went to Republicans. President Bush
  was the industrys top individual recipient,
  taking in more than 290,000 during 1999-2000,
  while top recipients in Congress included Sen.
  Jeff Bingaman (D-N.M.), who received more than
  100,000 Rep. Joe Barton (R-Texas), who received
  nearly 93,000 and Sen. George Allen (R-Va.),
  who took in just over 80,000. FROM THE CENTER
  FOR RESPONSIVE POLITICS
• http//www.opensecrets.org/pressreleases/energ
  ybriefing.htm

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And then there is renewable energy

• Given all that was at stake for energy interests
  in the 2000 elections, the alternative energy
  industrya category that includes wind,
  geothermal and solar power producerswanted to
  make sure that elected officials knew it was
  watching. Though the dollars it gave are
  microscopic compared with other energy interests,
  the industry increased its overall giving by more
  than seven times between presidential elections,
  going from 100,974 in soft money, PAC and
  individual contributions in 1995-96 to just over
  783,000 in 1999-2000. Much of that increase can
  be credited to the industrys dramatic rise in
  soft money checks, which jumped to 631,000
  during the last electionalmost 60 times what the
  industry gave during 1995-96.
• Perhaps not surprisingly, more than two-thirds
  of the industrys giving during 1999-2000 went to
  Democrats, with Al Gore (8,300) ranking as the
  industrys top individual recipient. Yet that
  marked a major turnaround from 1995-96, when
  Republicans took the bulk of the industrys
  money. That year, two Nebraska Republicans topped
  the list of recipients from the industry Rep.
  Jon Christensen (13,000 in individual and PAC
  contributions) and Sen. Chuck Hagel (12,000).
  FROM THE CENTER FOR RESPONSIVE POLITICS.
• http//www.opensecrets.org/pressreleases/energy
  briefing.htm

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Whether or not the Kyoto Protocol is ever
adopted, the central issue is how to reduce the
effects of greenhouse gasses on climate? There
are three policy approaches

• A tax on carbon-rich fuels
• Carbon sinks
• An emissions cap plus allowance for trading of
  emissions permits

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OPTION 1 A TAX ON CARBON-RICH FUELS. The tax
will raise their costs vis-à-vis other fuels and
induce technical change to facilitate the switch
to other fuels.

• The tax could be adjusted to the degree of
  dirtiness of the fuel.
• ? this would mean that high-sulfur (soft brown)
  coal would cost more to use than would low-sulfur
  (hard anthracite black) coal.
• ? this would also mean that clean fuels such as
  natural gas would be cheaper than dirty fuels
  such as coal and oil.

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OPTION 2 THE ROLE OF CARBON SINKS

• To understand this approach we need to
  reintroduce the idea of the industrialized (and
  rich) North and the agrarian (and poor) South.
• This is necessary since most of the current
  emissions of CO2 come from the North, but in the
  future, with economic development, the bulk of
  the additional loadings of CO2 will come from the
  poor countries as their standards of living
  improve.

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Consider the following figure in which GN
represents the stabilized time trend of CO2
emissions from the North, GS represents the
expected trajectory of CO2 emissions from the
South, and G represents the sum of CO2 emissions
from North and South.
G
GN
GS
Time
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Now let us introduce the idea of a sustainability
constraint in which we do not allow greenhouse
emissions to rise over time, but in fact force
them to decline to some level that will stabilize
atmospheric warming. This sustainability
constraint is shown below as G. The shaded area
shows the approximate amount by which total
expected emissions exceed the sustainability
constraint.
GHG emissions
G
Excess GHG emissions
G
GN
GS
Time
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But, if deforestation in the agrarian South is
not halted then the problem will be made worse
since forested areas have the ability to
sequester CO2 thereby mitigating the effects on
climate change. If deforestation is allowed to
continue and there are fewer hectares of forests
to sequester CO2 then we will need to reduce
emissions even more. This new sustainability
constraint is shown below as G. The new
cross-hatched area shows the approximate amount
by which total expected emissions exceed the
sustainability constraint with deforestation
continuing as it has in the past.
GHG emissions
G
Excess GHG emissions
G
GN
GS
G
Time
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We see, in fact, that a limit on total emissions
is closely tied up with the idea of carbon sinks.

• That is, the level of allowable emissions of
  CO2 (the sustainability constraint) is dependent
  on the rate at which forests in the agrarian
  South are destroyed.
• If there remain ample forested areas then the
  emissions cap can be lower than if forests
  continue to disappear.
• Let us see how this works.

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We start with a few assumptions

• First, economic development requires that some
  fraction of existing forests in the agrarian
  tropics be cut down for highways, resettlement of
  urban poor (squatters), and for earning foreign
  exchange from timber exportssuch earnings being
  used to invest in manufacturing, etc.
• Therefore, as development prospects go up, the
  ability to preserve the current extent of
  forested area will be reduced.

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This gives us the following relationship
GDP per capita 12,000 5,000
2,000 (current)
25 50 75
100 Percent of Current Forested
Area Maintained
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Let us now consider the capacity to sequester CO2
for different levels of forested area that can be
maintained.
Percent of Current Forested Area
Maintained 25 50
75 100
20 40 60 80 100 120 140 160
Million tons of CO2 sequestered
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Now consider the necessary abatement costs to
bring about various levels of CO2 reduction in
the industrialized North, under four assumptions
of CO2 sequestration in the South
per ton of CO2 abatement
Complete deforestation in tropics
Reduce forest cover to 25 of current level
Reduce forest cover to 75 of current level
Maintain current forest cover
160 MT 125 MT 40 MT
Zero CO2 CO2
CO2
Extent of Annual CO2 Sequestration
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Here we see that if all of the current forested
area in the South can be maintained, we will be
able to sequester 160 MT of CO2 per year without
spending any on abatement costs in the North.
But if the forested area in the South shrinks to
75 of its current level, carbon sequestration
will fall to a 125 MT, and if the forested areas
shrinks to 25 of its current level then only 40
MT of CO2 can be sequestered annually. Finally,
if all the forests are destroyed there will be no
CO2 sequestration.
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However, we know that maintaining large forested
areas will mean that the pace and extent of
economic development will suffer and that the
agrarian nations in the South will thereby be
held back. This suggests that some means to
share the financial burden of carbon
sequestration must be found. This is necessary
since the industrialized nations will be able
save money on reducing CO2 emissions by offering
to transfer funds to the poor agrarian nations in
the South to help offset their stifled economic
development prospects.
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Assume that the required reduction of CO2 in
order to comply with the sustainability
constraint is 200 MT per year. If all of that
had to be accomplished by abatement of CO2 in the
industrialized North, the total cost would be
shows as the shaded area below.
per ton of CO2 abatement
Reduce forest cover to 25 of current level
Reduce forest cover to 75 of current level
Maintain current forest cover
200 MT reduction
160 MT 125 MT 40 MT
Zero CO2 CO2
CO2
Extent of Annual CO2 Sequestration
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But if the South can be persuaded to preserve its
current level of forest cover then 160 MT of that
reduction could be accomplished through free
sequestration. With the remainder needing to
come from reduction in emissions in the
industrialized North.

• But of course it is not free since the South
  seems likely to suffer economically by continuing
  to preserve forests rather than cutting them down
  in the interest of development.
• What options exist?

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Notice that with the South providing 160 MT of
free sequestration, the industrialized North
only needs to spend money to reduce the remaining
40 MT per year. This total amount is shown as
the blue solid area below. This liberates the
North of the costs indicated below by the blue
checked area.
per ton of CO2 abatement
Reduce forest cover to 25 of current level
Reduce forest cover to 75 of current level
Maintain current forest cover
200 MT reduction
160 MT 125 MT 40 MT
Zero CO2 CO2
CO2
Extent of Annual CO2 Sequestration
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These cost savings in the North could easily be
devoted to programs to help the South undertake
economic development strategies that would make
it unnecessary to destroy forests.

• Examples would be technical assistance programs
  to launch sustainable development strategies
  without harming forests.
• Another might be development strategies to foster
  job creation and urbanization efforts to draw
  people to the cities

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One way to accomplish this brings us to our third
and final policy optionan emissions limit
accompanied by the trading of emission permits.
Assume that the sustainability constraint is 300
MT per year and that current emissions are 500
MT. This means that a reduction of 200 MT per
year is necessary. Notice that the North and the
South could share, somehow, the allowable
emissions of 300 MT.

• Each region (North and South) could be given
  emission permits totaling 150 MT of CO2 per year
  with the understanding that they could not exceed
  those limits.
• At the moment, assume that the South needs only
  50 MT of allowable emissions permits meaning that
  it receives permits for 100 MT that it does not
  need.
• At the same time, the North needs more than its
  150 MT. In fact, the North has a current
  emission level of 290 MT annually.

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We see here the possibility of a market for
permits emerging

• The South has 100 MT of permits that it does not
  need
• While the North needs permits allowing it to dump
  290 MT of CO2 annually. Unfortunately, the North
  has only 150 MT of its own allowable emissions,
  plus 100 that it can buy from the South. This
  means that it is 40 MT short of being able to
  come into compliance with the sustainability
  constraint of 300 MT of CO2.

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Recall from above that the retention of forests
in the South accomplishes 160 MT of reductions
free of charge. The North, in its purchase of
100 MT of emission permits from the South
represents a flow of money to the South. This
means that industries in the North will also need
to spend an additional amount (the blue solid
area below) on abatement of CO2.
per ton of CO2 abatement
Reduce forest cover to 25 of current level
Reduce forest cover to 75 of current level
Maintain current forest cover
200 MT reduction
160 MT 125 MT 40 MT
Zero CO2 CO2
CO2
Extent of Annual CO2 Sequestration
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To summarize

• Current emissions are 500 MT
• The sustainability constraint is 300 MT
• The required reduction is 200 MT
• Carbon sequestration in forest in the South will
  accomplish 160 MT of that
• Industries in the North must pay to remove 40 MT
  of CO2 annually
• Total emissions may not exceed 300 MT.

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Total emissions will be allocated as follows

• The North will emit 250 MT of CO2
• 150 MT of this will be from its own permits
• 100 MT of this will be from permits purchased
  from the South
• The South will emit 50 MT of CO2
• And it will sell permits for 100 MT to the North
• Payment for these permits can help to offset some
  of the costs of maintaining its forests to
  accomplish valuable CO2 sequestration.
• Additional funds preserving the Souths forests
  could come from industry or governments in the
  North.