The Economics of Climate Change

310 Pages·2004·2.81 MB·English

by  Owen T., Hanley N. (eds.)

The Economics of Climate Change
The impact of climate change is arguably one of the most significant challenges
facing the world today. Mitigating this impact will require profound changes in
many economic, business, political and industrial spheres.
This book provides a rigorous analytical assessment of the key issues at the
heart of the economics of climate change such as:
• the economics of the Kyoto Protocol;
• Cost-Benefit Analysis and climate change;
• developing countries and climate change.
With contributions from recognized international authorities in their respec-
tive disciplines, this readable, salient book will be appreciated by academics and
postgraduate students with an interest in environmental economics, climate
change and energy economics. The book will also appeal to environmental con-
sultants as well as policy makers.
Anthony D. Owen is Associate Professor in the School of Economics at the
University of New South Wales, Australia. Nick Hanley is Professor of
Environmental Economics at the University of Glasgow, UK.
©2004 editorial matter and selection, Anthony D. Owen and
Nick Hanley; individual chapters, the contributors
Routledge explorations in environmental economics
Edited by Nick Hanley
University of Glasgow
1 Greenhouse Economics
Value and ethics
Clive L. Spash
2 Oil Wealth and the Fate of Tropical Rainforests
Sven Wunder
3 The Economics of Climate Change
Edited by Anthony D. Owen and Nick Hanley
©2004 editorial matter and selection, Anthony D. Owen and
Nick Hanley; individual chapters, the contributors
The Economics of Climate
Change
Edited by Anthony D. Owen
and Nick Hanley
©2004 editorial matter and selection, Anthony D. Owen and
Nick Hanley; individual chapters, the contributors
Dedicated to
Jackie, Catherine and Rhys (A.D.O.)
Fiona, Rose, Charlie and Finn (N.H.)
First published 2004
by Routledge
11 New Fetter Lane, London EC4P 4EE
Simultaneously published in the USA and Canada
by Routledge
29 West 35th Street, New York, NY 10001
Routledge is an imprint of the Taylor & Francis Group
This edition published in the Taylor & Francis e-Library, 2004.
©2004 editorial matter and selection, Anthony D. Owen and
Nick Hanley; individual chapters, the contributors
All rights reserved. No part of this book may be reprinted or reproduced
or utilized in any form or by any electronic, mechanical, or other means,
now known or hereafter invented, including photocopying and recording,
or in any information storage or retrieval system, without permission in
writing from the publishers.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
A catalog record for this book has been requested
ISBN 0-203-49578-0 Master e-book ISBN
ISBN 0-203-57148-7 (Adobe eReader Format)
ISBN 0-415-28724-3(Print Edition)
©2004 editorial matter and selection, Anthony D. Owen and
Nick Hanley; individual chapters, the contributors
Contents
List of figures
List of tables
List of boxes
Acknowledgements
List of contributors
List of abbreviations
1 Introduction
ANTHONY D. OWEN AND NICK HANLEY
2 Global warming: scientific modelling and its relationship
totheeconomic dimensions of policy
IAN MOFFATT
3 From negotiation to implementation: the UN Framework
Convention on Climate Change and its Kyoto Protocol
JOANNA DEPLEDGE
4 Climate protection: what insight can economics offer?
JASON SHOGREN
5 The economics of the Kyoto Protocol
MICHAEL GRUBB
6 The role of economic instruments
FANNY MISSFELDT AND JOCHEN HAUFF
7 Cost-Benefit Analysis and climate change
NICK HANLEY AND DUGALD TINCH
©2004 editorial matter and selection, Anthony D. Owen and
Nick Hanley; individual chapters, the contributors
8 Economic modelling of global climate change
WARWICK J. McKIBBIN AND PETER J. WILCOXEN
9 The role of energy prices in global climate change
BRIAN S. FISHER AND MIKE D. HINCHY
10 Project-based mechanisms: baselines, additionality and
monitoring
JANE ELLIS
11 Developing countries and climate change
ANIL MARKANDYA AND KIRSTEN HALSNAES
12 The transition to renewable energy
ANTHONY D. OWEN
©2004 editorial matter and selection, Anthony D. Owen and
Nick Hanley; individual chapters, the contributors
Figures
2.1 CO concentrations and estimated temperature changes during
2
thelast160,000 years
2.2 Global mean combined land–air and sea–surface temperatures,
1861–1989
2.3 Major mechanisms of climate change and their time scales of
operation
2.4 Concentrations of greenhouse gases measured in air at Cape
Grim,Tasmania
2.5 Simulated global annual mean warming from 1860–1990
2.6 Four alternative scenarios of global warming
2.7 Global CO emissions related to energy and industry and land
2
use changes
5.1 CO emissions in 2000, per capita and population
2
5.2 Kyoto first period commitments in context: global emissions
dependenceupon follow-up and spillover
5.3 Impact of international trading on abatement costs
5.4 Kyoto commitments and trading potential
5.5 Impact of trading EIT emission surplus (‘hot air’) on permit
priceandEITrevenues
6.1 Economic equilibrium taxes and choice of permit quota
6.2 Incentive for innovation
6.3 Grandfathering of permits
6.4 Auction of permits/carbon taxes
6.5 Share of environmental taxes as part of the total tax revenue in
OECDcountries
8.1 Median carbon tax needed in 2010 to achieve Kyoto target, by
region
8.2 Median GDP loss in 2010 under Kyoto targets, by region
10.1 Influence of number of sample plots on the monitoring cost and
precisionlevel for the Noel Kempff project
©2004 editorial matter and selection, Anthony D. Owen and
Nick Hanley; individual chapters, the contributors
11.1 Costs of reducing carbon with flexibility
11.2 The prototype Carbon Fund
11.3 Impact of carbon finance on a sample of renewable efficiency
projects
12.1 Impact of an externality
12.2 The impact pathway methodology
12.3 Coal-based electricity chain
12.4 Electric technologies in EU 1980–1995
12.5 Incidence of a subsidy
©2004 editorial matter and selection, Anthony D. Owen and
Nick Hanley; individual chapters, the contributors
Tables
2.1 1987 greenhouse gas concentrations, trends and degree of
forcingrelativeto CO
2
2.2 Currently proposed targets for 2010, based on 1990 CO
2
emission levels
3.1 Countries included in Annexes I and II to the Convention
3.2 Individual emission targets for Annex I Parties under the Kyoto
Protocol
5.1 Greenhouse gases in the Kyoto Protocol
5.2 Emissions and commitments in the Kyoto Protocol
5.3 The internal distribution of the EU ‘bubble’
5.4 International carbon prices from economic models of the Kyoto
system
5.5 Emissions from Economies in Transition: base year and recent
trends
5.6 ‘Top-down’ estimates of the size of the CDM
5.7 International revenue flow constraints on carbon prices
5.8 Supply–demand balance in Kyoto system
6.1 Taxes in OECD member countries levied on electricity
consumption
6.2 Existing and emerging domestic trading regimes
7.1 Climate change impacts by income group
7.2 Aggregate social cost of global warming
7.3 The marginal cost of CO and N O emissions
2 2
8.1 Carbon taxes needed in 2010 to achieve Kyoto targets
9.1 Estimated fossil fuel subsidies 1990–1991 and 1995–1996
9.2 Estimated fossil fuel subsidies in 1991
9.3 Estimated fossil fuel subsidies 1997 and effect of their removal
10.1 Overview of CDM transaction cost estimates
11.1 Emissions of carbon by region
11.2 Net present value of climate change damages: 2000–2100
©2004 editorial matter and selection, Anthony D. Owen and
Nick Hanley; individual chapters, the contributors