Environmental Impacts of Economic Activity Global warming Acid Rain

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Environmental Impacts of Economic ActivityGlobal
warmingAcid Rain

• EEP 255
• Class 13 October 9, 2003

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Global Warming

• Two systems
• Global temperature control system (thermostat)
• Driven primarily by the carbon cycle (CO2
  emissions)
• More details on IPCC (Intergovernmental Panel on
  Climate Change) http//www.ipcc.ch/index.html

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Greenhouse Effect
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Greenhouse gases

• GHG GWP
• Carbon dioxide 1
• Methane 21
• Nitrous oxide 310
• CFCs and HCFCs 140-240000
• Water vapor ?
• Another major player in regional global climate
  is the ocean circulation!
• GWP global warming potential in CO2 equivalents

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Carbon Cycle
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Carbon Cycle

• Stocks
• Atmosphere
• Dissolved in water (HCO3 ions)
• Fossilized organic matter (limestone, coal,
  petroleum, natural gas)
• Soil organic matter
• Flows into biosphere
• Photosynthesis (plants and algae)
• Flow back into atmosphere
• Respiration
• Decay (CO2 or Methane)
• Burning (CO2)

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Carbon Cycle Accounting
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Carbon Balance

• Atmospheric increase  Emissions from Fossil
  fuels  Net emissions from changes in land
  use - Oceanic uptake - Missing carbon sink
• 3.3(0.2)5.5(0.5)1.6(0.7)-2.0(0.8)-1.8(1.2)
   
• In petagrams (billion MT)

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Global Warming indicators

• CO2 concentration up from 280ppm(1000-1750) to
  368ppm in 2000 (31 increase)
• Methane conc up from 700 ppb to 1750 ppb (151
  increase)
• N2O conc up from 270 ppb to 316 ppb (17
  increase)
• Global mean surface temp increased by 0.4-0.8oC
• Hot days/heat index increased, cold days
  decreased
• Sea level increased at 1-2mm/year
• Snow cover declined by 10, (duration reduced by
  2 weeks)

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Overview
Ecosystem Functions (Climate System
Hydrological System)
Ecosystem Functions (Carbon Cycle)
Initial Change in Natural Capital
(Gaseous Composition of Atmosphere and Acres of
Forested Land)
Change in Economic Activity
(Change in carbon dioxide emissions, land use,
timber harvest)
Crops Health Care Water Services Forest
Products Recreation
Further Change in Natural Capital and
Intermediate Ecosystem Services
Ecosystem Functions (Photosynthesis, Food Chain)
Change in Intermediate Final Economic Goods
Further Change in Natural Capital (e.g., Forest
Composition) and Final Ecosystem Services
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Economics of Global Warming

• Determining Economic Causes
• Assessing Economic Damages
• Identifying Policy Options
• Evaluating Economic Impacts of Policy Change
• We will discuss 1 and 2 today and 3 and 4 later
  in the course

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Major Economic Causes of Carbon Dioxide (CO2)
Emissions in the U.S. Fossil Fuel Combustion by
Industry Sector (1995)
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Per capita CO2 emissions are small in developing
countries
(metric tons of carbon dioxide)
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US GHG Emissions(CO2eq)
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Impacts on Ecosystem Services
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Temperature Effects
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Precipitation Effects
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Sea Level Effects
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Source IPCC Third Assessment Report (2001)
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Health Impacts

• Heat wave related
• Higher ground level ozone related
• Temperature vector (mosquito) related malaria,
  encephalitis, yellow fever, dengue fever
• Algal bloom related(Cholera vector)

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Agriculture

• Yield effects
• Water availability uncertainty/ground water
• Temperature (evaporation/transpiration)
• CO2 Fertilization
• Weeds, insects and diseases
• Soil conditions
• Winds

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Water Resources

• Higher evaporation and higher precipitation
• Regional/seasonal variations
• Early snowmelt and summer supplies
• More precipitation thru storms

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Economic Goods Affected by Water Resource Impacts

• Hydropower (see example)
• Recreation (see example)
• Water Utilities
• Navigation
• Flood Control

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Change in Ecosystem Good (decreased river water
flow rate) changes Hydropower Supply
Price/ kilowatt
MC2
MB
MC1
kilowatts
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Decreased Net Benefits (MB minus MC) from
Hydropower
Price/ kilowatt
MC2
Lost Net Benefits Area B
MB
MC1
A
B
kilowatts
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Change in Ecosystem Good (reduced catch rate)
changes Demand for Recreational Fishing Trips
Price/ trip
MC
MB1
MB2
Fishing trips
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Decreased Net Benefits (MB minus MC) from
Recreational Fishing Trips
Price/ trip
Lost Net Benefits Area B
MC
MB1
MB2
B
A
Fishing trips
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Impacts of Global warming (2.5C) on US Economy
Billion 1990 dollars/year
Agriculture 17.5 Forest loss 3.3 Species
Loss 4.0 Sea level rise (dykes, land
loss) 7.0 Electricity requirements 11.7 Non-elect
ric heating -1.3 Human morbidity 5.8 Migration
0.5 Hurricanes 0.8 Leisure activities 1.7 Wa
ter supply 7.0 Others 3.6 TOTAL 61.6
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Question

• Why cant the markets which are so good at
  providing everything we want so efficiently (with
  no central coordinating authority!), also provide
  the required environmental quality (GHG
  concentration) without any external intervention
  in the markets?
• MARKET FAILURE

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Policy Options

• Emission limits
• Technology standards (emission control, energy
  efficiency,renewable fuel mix, biobased material
  content)
• Carbon taxes
• Carbon subsidies (green payments)
• Carbon emission permit trading
• Carbon sequestration
• RD

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Acid Rain
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Overview
Ecosystem Functions (Hydrological System)
Ecosystem Functions (Wind)
Initial Change in Natural Capital
(Chemical Composition of Atmosphere)
Change in Economic Activity
(Change in sulfur dioxide and nitrogen oxide
emissions)
Recreation Maintenance Forestry Health Care
Change in Intermediate Ecosystem Services (Acid
Precipitation)
Ecosystem Functions (Hydrological System,
Photosynthesis, Food Chain)
Change in Intermediate Final Economic Goods
Further Change in Natural Capital (Lake Forest
Decline) and Final Ecosystem Services (Fish Catch
Rate)
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Major Economic Causes of Acid Rain

• Emissions of sulfur dioxide (SO2)
• 2/3s of all emissions are from fossil fuel power
  plants
• Emissions of nitrogen oxides (NOx)
• 1/3 of all emissions are from fossil fuel power
  plants
• SO2 H2O H2SO4 (Sulfuric acid)
• NOX H2O HNO3 (Nitric acid)

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Estimated Emissions from Fossil-Fueled U.S.
Electric Utilities, 1995 Through 1999 (Thousand
Short Tons)
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Effects of Acid Rain

• Surface waters (e.g., lakes and streams)
• Forests
• Automotive Coatings (e.g., car paint)
• Materials (e.g., buildings, bridges, monuments)
• Visibility (haze)
• Human Health (e.g., bronchitis and asthma)

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Economic Damages from Acid Rain

• Fish catch in lakes and streams
• Forest products (e.g., timber) and services
  (e.g., recreational enjoyment habitat for
  wildlife)
• Maintenance of automotive coatings (e.g., car
  paint)
• Maintenance of materials (e.g., buildings,
  bridges, monuments)
• Cultural enjoyment of monuments
• Visibility and aesthetics (brown leaves)in parks
• Medical care

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http//www.ipcc.ch/present/graphics.htm