Economics of Climate Change in East Asia

216 Pages·2013·1.41 MB·English

Economics of
Climate Change
in East Asia
Michael Westphal
Gordon Hughes
Jörn Brömmelhörster
(Editors)
Economics of
Climate Change
in East Asia
Michael I. Westphal
Gordon A. Hughes
Jörn Brömmelhörster
(Editors)
© 2013 Asian Development Bank
All rights reserved. Published in 2013.
Printed in the Philippnes.
ISBN 978-92-9254-288-7 (Print), 978-92-9254-289-4 (PDF)
Publication Stock No. RPT125169-2
Cataloging-In-Publication Data
Westphal, Michael I.; Hughes, Gordon A.; Brömmelhörster, Jörn
Economics of climate change in East Asia.
Mandaluyong City, Philippines: Asian Development Bank, 2013.
1. Economics. 2. Climate change. 3. East Asia. I. Asian Development Bank.
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Contents
List of Figures, Tables, and Boxes v
Abbreviations x
Weights and Measures xi
Foreword xii
Acknowledgments xiv
Executive Summary xvi
Introduction 1
The Project 1
Organization of the Report 2
Key Considerations for the Economics of Climate Change Adaptation 2
Combining Analyses of Mitigation and Adaptation 4
Chapter 1 Climate Change Impact on East Asia 5
Key Messages 6
Study Area 7
Greenhouse Gas Emissions 8
Historical Climate Change and Climate Variability 10
Projected Climate Change 12
Climate Change Impacts 14
Appendix: H istorical Climate and Climate Change Projections 24
Chapter 2 The Economics of Adaptation in the Infrastructure Sector 27
Key Messages 28
Introduction 29
Methodology 30
Results 36
Conclusions 46
Appendix: Socioeconomic Projections 48
Chapter 3 The Economics of Adaptation in the Coastal Sector 59
Key Messages 60
Introduction 61
Methodology 65
Results 74
Conclusion 82
Chapter 4 The Economics of Adaptation in the Agriculture Sector 85
Key Messages 86
Introduction 87
Methodology 88
Results 92
Conclusion 100
iii
iv Contents
Chapter 5 The Impacts of Climate Change on Poverty in East Asia 103
Key Messages 104
Introduction 105
Methodology and Results 105
Chapter 6 G reenhouse Gas Projections and the Costs of Sector-Specific
Mitigation Options 111
Key Messages 112
Introduction 113
Methodology 113
Results 117
Appendix 1: Technology Options in the Asia-Pacific Integrated Model Enduse Database 151
Appendix 2: Explanation of Some Technologies in the Marginal Abatement Cost Curves 152
Chapter 7 Integrated Assessment Modeling in East Asia 153
Key Messages 154
Introduction 155
Methodology 156
Results 157
Chapter 8 Climate Policy in East Asia 171
Key Messages 172
Introduction 173
Country Policies and Arrangements for Addressing Climate Change 173
The Key Pillars of Climate Policy 181
Future Developments in Climate Policy 182
Policies for Innovation to Enhance Climate Policies 183
Opportunities for Regional Cooperation 184
Bibliography 187
List of Figures, Tables, and Boxes
Introduction
Box
1 Climate Scenarios and Uncertainty 4
Chapter 1
Figures
1 Total Energy-Related Emissions in East Asia and Other Countries versus
Per Capita Income, 1971–2009 10
2 Energy Intensity in East Asia and Other Countries versus Per Capita Income, 1971–2009 11
3 S ector Shares of Total Greenhouse Gas Emissions in East Asia, 2010 12
4 Climate-Related Natural Disasters in the People’s Republic of China, 1970–2011 13
5 Comparison of Actual Energy-Related Emissions with Intergovernmental Panel on
Climate Change Projections, 1990–2010 15
6 Change in Mean Annual Temperature for East Asia, 2050
(2046–2055 versus 1961–1990) 16
7 Change in Mean Annual Temperature for East Asia, 2090
(2086–2095 versus 1961–1990) 17
8 Change in Mean Annual Precipitation for East Asia, 2050
(2046–2055 versus 1961–1990) 19
9 Change in Mean Annual Precipitation for East Asia, 2090
(2086–2095 versus 1961–1990) 20
Tables
1 Total Energy-Related Carbon Dioxide Emissions, 1971–2010 9
2 Sector Breakdown of Energy-Related Carbon Dioxide Emissions in 2010 9
3 Per Capita Energy-Related Carbon Dioxide Emissions 9
4 Energy Intensity 11
5 Country Averages for the General Circulation Models Ensemble Median for the
Change in Mean Annual Temperature in East Asia 15
6 Country Averages for the General Circulation Model Ensemble Median for the
Change in Mean Annual Precipitation and Mean Seasonal Precipitation in East Asia 18
7 The Main Impacts of Climatic Exposures on Health 21
Box
1 Are Heat Waves Responsible for Additional Mortality? 23
Chapter 2
Figures
1 Impact of Climate Change on Short-Term Flooding 34
2A Net Benefits of Climate Proofing for All Infrastructure in the People’s Republic of China 41
2B Net Benefits of Climate Proofing for All Infrastructure in Japan 41
2C Net Benefits of Climate Proofing for All Infrastructure in the Republic of Korea 41
v
vi List of Figures, Tables, and Boxes
2D Net Benefits of Climate Proofing for All Infrastructure in Mongolia 41
3A Net Benefits of Climate Proofing by Infrastructure Category in the
People’s Republic of China 42
3B Net Benefits of Climate Proofing by Infrastructure Category in Japan 42
3C Net Benefits of Climate Proofing by Infrastructure Category in the Republic of Korea 42
3D Net Benefits of Climate Proofing by Infrastructure Category in Mongolia 42
4 Net Benefits of Climate Proofing for All Infrastructure by Regions in the
People’s Republic of China 43
Tables
1 Average Costs of Adaptation for Climate Proofing by Country and/or
Region and Climate Scenario, 2011–2050 37
2 Average Costs of Climate Proofing by Infrastructure Category and Climate Scenario,
2011–2050 39
A1 Projections of Total Population, 2010–2050 53
A2 Projections of Population Aged 0–14 Years, 2010–2050 54
A3 Projections of Population Aged Over 65 Years, 2010–2050 55
A4 Projections of Population Living in Urban Areas, 2010–2050 56
A5 Projection of Gross Domestic Product per Person, 2010–2050 57
Box
1 Could Appropriate Investments in Infrastructure Help Avert the Health Impacts of
Climate Change? 35
Chapter 3
Figures
1 East Asian Deltas 61
2 Schematic of the DIVA Model Process 66
3 Assumed Change in the Distribution of Extreme Water Levels in Shanghai,
People’s Republic China, Taking into Account an Increase in Mean Sea Level
(High Scenario) with an Increase in Tropical Storm Intensity 68
4 Distribution of Average Annual Sea-Flood Costs for the Coastal Areas of the
People’s Republic of China under the Medium Sea-Level Rise Scenario, 2010–2050 78
5 Average Annual Total Adaptation Costs for Coastal Areas of the
People’s Republic of China, 2010–2050 80
6 Relative Breakdown of Annual Climate Change Adaptation Costs for the Medium
Sea-Level Rise Scenario, 2010–2050 83
Tables
1 Population in the Low-Elevation Coastal Zone in East Asia 62
2 Main Physical and Ecosystem Effects of Increased Carbon Dioxide and
Climate Change in Coastal Areas 63
3 Sea-Level Rise Scenarios Considered, 2010–2100 67
4 National Population and Gross Domestic Product for the People’s Republic of China,
Japan, and Republic of Korea, 2010 and 2050 69
5 Scenario Combinations Used in this Study 70
6 Average Annual Rates of Dryland Loss Due to Submergence and Erosion for the
Medium Sea-Level Rise Scenario, 2010–2050 74
7 Average Annual Rates of Dryland and Wetland Loss for the People’s Republic of
China Under All Sea-Level Rise Scenarios, 2010–2050 75
8 Coastal Wetland Area Over Time for All Scenarios, 2010–2050 75
9 Cumulative Forced Migration and Associated Costs, 2010–2050 76
List of Figures, Tables, and Boxes vii
10 Average Annual National Damage Costs with and without Adaptation, 2010–2050 77
11 Average Total National Annual Adaptation Costs, 2010–2050 79
12 Average Annual Adaptation Costs under the Medium Sea-Level Rise Scenario in
Areas of the People’s Republic of China, 2010–2050 79
13 Increase in Annual Adaptation Costs due to Tropical Cyclones 81
14 Average Annual Port Area Upgrade Costs for All Scenarios, 2010–2050 82
15 Average Annual Incremental National Climate Change Adaptation Costs, 2010–2050 83
Chapter 4
Figures
1 Share of the Cropland Area in 2000 Where Yields Decline by Climate Scenario,
2030 and 2050 94
2 Impact of Climate Change on Agricultural Prices in East Asia, 2050 96
3 Impacts of Climate Change on Crop Supply and Demand in 2050 97
4A Adaptation Cost in 2050 with No Exogenous Yield Growth 98
4B Adaptation Cost in 2050 Allowing for Historical Exogenous Yield Growth 98
4C Adaptation Cost in 2050 Allowing for IMPACT Exogenous Yield Growth 99
5 Impact of a Consumer Subsidy on Crop Supply and Demand in 2050 100
6 Shifts in Crop Production due to Consumer Adaptation Policy in 2050 101
Tables
1 Changes in Total Calorie Production due to Climate Change, 2030 and 2050 93
2 Changes in Crop Yields due to Climate Change in East Asia, 2050 93
3 Change in Total Calorie Production from Crops across Climate Change Scenarios,
2030 and 2050 95
Box
1 Carbon Fertilization 90
Chapter 5
Tables
1 Baseline Projections of Poverty Indices with No Climate Change, 2010–2050 107
2 Impact of Climate Change on Poverty Indices, 2050 107
3 Agricultural Prices and Production in the People’s Republic of China, 2030 and 2050 109
Chapter 6
Figures
1 Asia-Pacific Integrated Model Enduse Model 114
2A Emissions and Abatement Potential in the People’s Republic of China under the High
Discount Rate Scenario 118
2B Emissions and Abatement Potential in the People’s Republic of China under the Low
Discount Rate Scenario 119
3A Emissions and Abatement Potential in Japan under the High Discount Rate Scenario 120
3B Emissions and Abatement Potential in Japan under the Low Discount Rate Scenario 121
4A Emissions and Abatement Potential in the Republic of Korea under the High Discount
Rate Scenario 122
4B Emissions and Abatement Potential in the Republic of Korea under the Low Discount
Rate Scenario 123
5A Emissions and Abatement Potential in Mongolia under the High Discount Rate Scenario 124
5B Emissions and Abatement Potential in Mongolia under the Low Discount Rate Scenario 125
viii List of Figures, Tables, and Boxes
6 Sector Composition of Greenhouse Gas Emissions under Business-as-Usual Scenario,
2030 126
7 Sector Composition of Maximum Abatement Potential, 2030 127
8A Marginal Abatement Cost Curve for the People’s Republic of China for the
High Discount Rate Scenario, 2030 129
8B Marginal Abatement Cost Curve for the People’s Republic of China for the
Low Discount Rate Scenario, 2030 130
9A Marginal Abatement Cost Curve for Japan for the High Discount Rate Scenario, 2030 131
9B Marginal Abatement Cost Curve for Japan for the Low Discount Rate Scenario, 2030 132
10A Marginal Abatement Cost Curve for the Republic of Korea for the High Discount
Rate Scenario, 2030 133
10B Marginal Abatement Cost Curve for the Republic of Korea for the Low Discount
Rate Scenario, 2030 134
11A Marginal Abatement Cost Curve for Mongolia for the High Discount
Rate Scenario, 2030 135
11B Marginal Abatement Cost Curve for Mongolia for the Low Discount
Rate Scenario, 2030 136
12 Grouping of Abatement Options by Cost Range, High Discount Rate Scenario in 2030 137
13A Impact of 5-Year Delay for the Power Sector in the People’s Republic of China 138
13B Impact of 5-Year Delay for the Power Sector in Japan 139
13C Impact of 5-Year Delay for the Power Sector in the Republic of Korea 140
13D Impact of 5-Year Delay for the Power Sector in Mongolia 141
14 Primary Energy Consumption in the People’s Republic of China under
Alternative Abatement Strategies 142
15 Composition of Primary Energy Consumption in the People’s Republic of China 142
16 Barriers to Energy Efficiency Investments 143
Tables
1A Service Demands in the People’s Republic of China, 2020 and 2030 115
1B Service Demands in Japan, 2020 and 2030 115
1C Service Demands in the Republic of Korea, 2020 and 2030 116
1D Service Demands in Mongolia, 2020 and 2030 116
2 Discount Rates by Sector and Scenario 117
3 Proportion of Abatement Potential Achievable at a Negative Marginal Abatement Cost 128
4 Policy Recommendations to Promote Energy Efficiency 143
Boxes
1 How to Read a Marginal Abatement Cost (MAC) Curve 128
2 The Fukushima Disaster and Japan’s Impressive Reduction in Electricity Usage 145
3 Reducing CO Emissions along with Improving Local Air Quality 146
2
4 Carbon Markets in East Asia 149
Chapter 7
Figures
1 Comparison of Emissions under the Business-as-Usual and Copenhagen–Cancun
Convergence Scenarios, 2010–2100 158
2 Increase in Global Mean Temperature for the Business-as-Usual Scenario, 2010–2100 159
3 Impact of Climate Change under the Business-as-Usual Scenario for East Asia,
2010–2100 160
4 Impact of Climate Change under the Business-as-Usual Scenario, 2100 161
5 Increase in Global Mean Temperature under the Copenhagen–Cancun
Convergence Scenario, 2010–2100 162
List of Figures, Tables, and Boxes ix
6 Impact of Climate Change under the Business-as-Usual and Copenhagen–Cancun
Convergence Scenarios, 2100 163
7 Time Sequence of Marginal Abatement Cost Curves under the Copenhagen–Cancun
Convergence Scenario for the People’s Republic of China 164
8 Emissions for East Asia under Alternative Scenarios, 2020–2100 166
9 Abatement Costs for East Asia under Alternative Scenarios, 2020–2100 167
Tables
1 Marginal Cost of Abatement for Copenhagen–Cancun Convergence Emissions
Relative to the Business-as-Usual Scenario 164
2 Annual Costs of Abatement for Copenhagen–Cancun Convergence Emissions
Relative to the Business-as-Usual Scenario 165
3 Annual Costs of Planned Adaptation and Residual Damages for East Asia 168
4 Net Average Annual Costs of Climate Change for East Asia 169
5 Net Annual Costs of Climate Change for East Asia – Alternative Version 169
Chapter 8
Table
1 Targets of the 12th Five-Year Plan in the People’s Republic of China 176
Boxes
1 Key Objectives of Climate Change Policy in the People’s Republic of China 175
2 The People’s Republic of China – Global Leader in Energy Efficiency and
Renewable Energy 175
3 Energy and Environment Policy Redesign in Japan 178
4 Civil Initiatives to Promote Green Growth in Japan and the Republic of Korea 179
5 Key Elements of the Republic of Korea’s Green Growth Strategy 180
6 Carbon Taxes or Carbon Trading? 183