New Climate Economics: Methodological Choices and Recommendations

Ackerman F, Chalabi Z, Mechler R, & Scrieciu S (2011). New Climate Economics: Methodological Choices and Recommendations. Stockholm Environment Institute (May 2011)

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Abstract

Projections of future impacts, benefits and costs of climate mitigation and adaptation policies are based on both detailed empirical research, and modelling choices and assumptions that frame the analysis. For instance, assumptions about the expected growth of population and incomes drive the projections of greenhouse gas emissions. Assumptions about the pace and nature of innovation, the economy-environment-society interactions and the relative value of future versus current resources affect the estimates of the long-run benefits or costs of climate policies. Assumptions about future population health in the business-as-usual scenario affect the estimates of the health benefits or harms of climate change mitigation and adaptation policies. Further, estimates and assumptions regarding climate variability affect the benefits of adaptation measures to tackle potential increases in climate-related extreme events. Also, methodological choices about the treatment of disparate, incommensurable impacts are often decisive for policy decisions.

This document presents a series of what we refer to as critical issues for climate mitigation and adaptation policy analysis, involving overarching choices that affect multiple areas of expert analysis, and in particular the socio-economic assessments of climate policies. The following pages identify key issues for a comprehensive and realistic economic analysis of climate policies, present a few major options for answering those issues, and recommend a preferred course of action or option for analysts to consider (akin to what some refer to as "new economic thinking"). The issue of risk and uncertainty has been addressed in a separate supporting guidance document, due to its overriding importance and specific inter-disciplinary profile (available on the website of the MCA4climate initiative: www.mca4climate.info). In addition, some practical implementation aspects of the issues discussed below have been provided in Annex 1 at the end of this document.

Some of the topics addressed here may be more amenable to qualitative than to quantitative analysis; potential examples include the valuation of non-market "goods" such as human health and environmental protection, and the goal of intergenerational equity. It is nonetheless important to understand the implications of both quantitative and qualitative approaches to these issues, since both approaches are often raised in the discussion of climate policy. The guiding principles underpinning the overall MCA4climate approach.

Item Type: Other
Research Programs: Risk, Policy and Vulnerability (RPV)
Risk & Resilience (RISK)
Bibliographic Reference: Stockholm Environment Institute (May 2011)
Depositing User: IIASA Import
Date Deposited: 15 Jan 2016 08:45
Last Modified: 04 Apr 2016 10:16
URI: http://pure.iiasa.ac.at/9730

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