Assumptions Of Current Economic Models

All of these studies make assumptions about future data. For example, each study makes assumptions on the future costs of money. The IPCC TAR assumes certain economic offsets, through tradable emissions permits, and makes additional assumptions within projected ranges for monies generated or saved through taxing structures, incentive sector tax cuts rewarding greater fuel efficiencies or encouraging alternative forms of energy, incentive sector tax increases reducing carbon fuel consumption, the costs of labor, market conditions, the value of technological innovation, and recycling methods. Assumptions are also made about the rate of regulatory and policy changes and the impact of these changes. For example, different studies make different reduction projections of carbon intense energy by assuming different lengths of possible life extensions of existing nuclear power generation plants, different lengths of time to get new nuclear plants producing energy, and different lengths of service for the new and refurbished nuclear plants.

Assumptions are also made concerning the net return on new technology created to meet all of the new policies and regulations aimed at mitigation. For example, it is assumed that money, jobs, and new businesses will be generated by researching and creating alternative forms of energy, hybrid cars and their support systems, new power plants using energies such as wind or geothermal, and other, as yet unforeseen, technologies. Conversely, however, the expenditures for these new technologies will draw monies from other existing sectors costing loss of jobs, revenue, and taxes that could offset the economic advantages of the new technologies. The WIAGEM study projections are made assuming some value to technological change and assuming no value to technological change.

Though it is difficult or even impossible to quantify the real monetary costs of affecting climate change, climate change will have great impact on society, population densities (out migration and in migration), agriculture, infrastructure, manufacturing, and intergovernmental relations. These effects will bear more intensely on the poor than those wealthy enough to adapt and prosper from climate change. The cost of doing nothing is high. This can be seen in the cost of catastrophic natural disasters that pale in comparison to the potential catastrophes that even the most conservative climate change models project. The total cost of catastrophic storm damage in the United States 1980-2005 is estimated to be in excess of $560 billion, with Hurricane Katrina alone causing between $150-$200 billion in economic damage. Worldwide natural catastrophes cost another $220 billion.

SEE ALSO: Climate; Climate Change, Effects; Climate Cycles; Climate Models; Computer Models; Economics, Impact From Climate Change; Historical Development of Climate Models; Impacts of Global Warming.

BIBLIOGRAPHY. Mayer Hillman, Tina Fawcett, and S.C. Rajan, The Suicidal Planet: How to Prevent Global Climate Catastrophe (Thomas Dunne Books, 2007); Chris Hope, John Anderson, and Paul Wenman, "Policy Analysis of the Greenhouse Effect: An Application of the PAGE Model," Energy Policy (March 3, 1993); Sonia LaBatt and

R.R. White, Carbon Finance: The Financial Implications of Climate Change (Wiley Finance, 2007); Marcel Leroux, Global Warming—Myth or Reality? The Erring Ways of Climatology (Springer Praxis Books, 2005); J.J. McCarthy, et al., eds., Climate Change 2001: Impacts, Adaptation, and Vulnerability: Contribution of Working Group II to the Third Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge University Press, 2001); Bert Metz, et al., eds., Climate Change 2001: Mitigation: Contribution of Working Group III to the Third Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge University Press, 2001); Nicholas Stern, The Economics of Climate Change: The Stern Review (Cambridge University Press, 2007); R.T. Watson, ed., Climate Change 2001: Synthesis Report: Third Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge University Press, 2002).

Richard Milton Edwards University of Wisconsin Colleges Milwaukee School of Engineering

Guide to Alternative Fuels

Guide to Alternative Fuels

Your Alternative Fuel Solution for Saving Money, Reducing Oil Dependency, and Helping the Planet. Ethanol is an alternative to gasoline. The use of ethanol has been demonstrated to reduce greenhouse emissions slightly as compared to gasoline. Through this ebook, you are going to learn what you will need to know why choosing an alternative fuel may benefit you and your future.

Get My Free Ebook

Post a comment