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Emission scenarios and economic impacts of climate change

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what label do YOU use to refer to continued unrestricted emissions growth distinguished by no accompanying commitments/pledges to do anything?

BAU. And all China has pledged is to do their BAU.

With respect to China, there are 4 things you need to understand:

1. China's GDP per capita growth will slow down as it catches up to the rest of the world.

2. China's population growth rate will slow down due to low fertility rates.

3. Economies with higher GDPs per capita have a greater GDP to CO2 emission ratios. (i.e. economies become less CO2 emission intensive as they develop).

4. Technology change over the coming decades will allow economies to be more CO2 emission efficient.

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BAU. And all China has pledged is to do their BAU.

so... in response to my question asking you to state what label YOU would use to refer to continued unrestricted emissions growth distinguished by no accompanying commitments/pledges to do anything... you state that is "BAU". In your labeling of BAU as "no commitments/pledges", just how is a Chinese pledge to reach a peak emissions level by 2030 (while cutting its net carbon pollution between 2015 and 2030 by about 20 billion tons), accompanied with a Chinese pledge to increase the share of energy consumed from non-emissions sources like renewables, nuclear energy and hydro-electricity to 20 percent by 2030... how are those Chinese pledges 'China business as usual'? And, alternatively, to you... what wouldn't be Chinese BAU?

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Because they would have done all that anyway under a BAU scenario. All they did was pledge to do their BAU.

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Because they would have done all that anyway under a BAU scenario. All they did was pledge to do their BAU.

so in regards those Chinese pledges and the projected results therein, where you say pledges aren't a part of BAU... are you saying none of those targets and accompanying results will reflect upon policy decisions... that "stuff will just happen"?

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I'm saying that all China did was pledge to do what is expected for China under a BAU scenario. Do you want me to estimate what I think china would emit under a BAU scenario?

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I'm saying that all China did was pledge to do what is expected for China under a BAU scenario. Do you want me to estimate what I think china would emit under a BAU scenario?

Guess I'll do this.

First, I'll try to predict the change in China's Real GDP per capita over time using a simple Solow Model. In the long run, China's growth rate will eventually approach the US growth rate (which was ~1.87% since 1870, which corresponds to a linear change in ln(rGDP/capita) of 0.0185 per year).

https://aneconomicsense.files.wordpress.com/2013/10/long-run-us-gdp-per-capita-growth-1870-2088-in-logarithms.png

If I take China's real PPP GDP per capita from the world bank (http://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD) and adjust it to real 2009 US $ using the GDP deflator from the St. Louis federal reserve (https://research.stlouisfed.org/fred2/series/GDPDEF/#) and look at the difference in the change in ln(rGDP/capita) from the long term change for the past 10 years, then I get the following estimate for the functional form of the change in ln(rGDP/capita): 0.018527 + 0.164962*exp(-0.093912*(year-2000)). Using this estimate, I estimate China's real GDP per capita in US 2009 $ until 2050.

Next, I have to estimate how CO2 emissions per capita are affected by real GDP per capita and due to technological progress. To do this I look at the CO2 emissions per capita, real GDP per capita and population for the G20 countries minus Argentina (Argentina had missing data).

http://data.worldbank.org/indicator/EN.ATM.CO2E.PC

http://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD

http://data.worldbank.org/indicator/SP.POP.TOTL

I convert the real GDP per capita values using the GDP deflator and then using the data starting in 2004 I perform a population weighted regression of the following equation:

ln(CO2 emissions/real GDP) = β0 + β1*ln(rGDP/capita) + β2*(year-2000) + β3*China + error, where China is a dummy variable for if an observation contains china. My estimates for β0, β1, β2, and β3 are -7.086693657, -0.086201078, -0.017396781, 0.767719507 respectively. As expected, the CO2 efficiency of a country increases with both real GDP per capita and time. Using this, I predict China's CO2 emissions per capita until 2050.

Lastly, I need to estimate China's future population. I can get estimates from here (http://populationpyramid.net/china/) and simply perform a linear interpolation for missing years. The population pyramid values are slightly inconsistent with the world bank values, so I offset the population pyramid values by 30426000 for consistency.

Putting all this together, I get the following estimates of annual CO2 emissions in gigatons of CO2 (so divide by 44/12 for gigatons of carbon) for China:

2020 12.90

2021 13.21

2022 13.50

2023 13.77

2024 14.03

2025 14.27

2026 14.47

2027 14.65

2028 14.82

2029 14.98

2030 15.12

2031 15.24

2032 15.34

2033 15.43

2034 15.51

2035 15.59

2036 15.64

2037 15.68

2038 15.71

2039 15.74

2040 15.76

2041 15.76

2042 15.75

2043 15.74

2044 15.72

2045 15.70

2046 15.66

2047 15.62

2048 15.57

2049 15.52

2050 15.47

Under BAU, China peaks emissions in 2040. However, remember that China's pledge was to peak emissions 'around' 2030 and there are no consequences for China if they don't peak in 2030. There is basically no change in emissions from 2030-2040, under business as usual, China is peaking 'around' 2040. So all China has done is pledge their BAU.

Edited by -1=e^ipi

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Guess I'll do this.

So all China has done is pledge their BAU.

you talking to yourself again? :lol: Ya see... I've had the "moderator" warn/suspend me for quoting my own posts! You must be special around here cause you keep doing it, apparently, without consequence!

but hey now! I saw what you did there... you sly dog you. You managed to squeeze in just a teensy bit of your math wizardy... but you really tempered it down - good on ya, mate! (/snarc)

without even bothering to look at your "analysis", riddle me this: how do you view the UNFCCC COP process; that long-winding iterative process over these last couple of decades... presumably all coming to a cumulative head in Paris later this year as a part of COP21? All that muti-decadal iterative COP world nation government negotiation focused on emission reduction... targets, commitments/pledges, results, monitoring, verification, etc., etc., etc.! All that multi-decade buildup towards the "all country inclusive" COP21 with grand presumptions toward negotiated pledges/commitments... legally binding, no less? Just where does the COP iterative process fit in your world of "BAU sans emission reduction pledges/commitments"?

.

Edited by waldo

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how do you view the UNFCCC COP process; that long-winding iterative process over these last couple of decades... presumably all coming to a cumulative head in Paris later this year as a part of COP21?

It's a bunch of rent seeking activity by a bunch of bureaucrats and politicians with no strong basis. Politicians can extort money from each other and delude themselves that they are saving the planet while jetting around from city to city staying in first class hotels and eating fancy food. Most of the people there are scientifically illiterate, don't understand physics or climate science, and likely don't understand economics either.

Just where does the COP iterative process fit in your world of "BAU sans emission reduction pledges/commitments"?

How about base global climate policy on empirical data rather than what some politicians and bureaucrats subjectively feel on any given day?

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It's a bunch of rent seeking activity by a bunch of bureaucrats and politicians with no strong basis. Politicians can extort money from each other and delude themselves that they are saving the planet while jetting around from city to city staying in first class hotels and eating fancy food. Most of the people there are scientifically illiterate, don't understand physics or climate science, and likely don't understand economics either.

and here I thought in determining capability and impact, world governments committing their countries to policy action, particularly when legally binding, would avail themselves of, at least, their own countries scientific/economic resources, if not from the broader world-wide scientific/economic resource pool. Go figure.

.

How about base global climate policy on empirical data rather than what some politicians and bureaucrats subjectively feel on any given day?

who would be at YOUR COP table negotiating policy direction for world governments? But wait now... in your "BAU sans policy world" devoid of mitigating emission reduction pledges/commitments... that emission reduction thingee just happens on its own! Policy... smolicy! :lol:

.

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who would be at YOUR COP table negotiating policy direction for world governments? But wait now... in your "BAU sans policy world" devoid of mitigating emission reduction pledges/commitments... that emission reduction thingee just happens on its own! Policy... smolicy! :lol:

As I said earlier. I think that a global pigouvian tax on CO2 emissions makes sense.

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As I said earlier. I think that a global pigouvian tax on CO2 emissions makes sense.

The trouble such a tax would do little to change behavior if it was levied at a level consistent with the estimated social cost of carbon because viable alternatives to emitting CO2 simply do not exist.

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The trouble such a tax would do little to change behavior if it was levied at a level consistent with the estimated social cost of carbon because viable alternatives to emitting CO2 simply do not exist.

It shouldn't be a question of the magnitude of change a policy will do, but whether the policy maximizes the well-being of society.

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As I said earlier. I think that a global pigouvian tax on CO2 emissions makes sense.

you mean a... BigOil... 'CostOfDoingBusiness' tax? :lol:

.

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Earlier I alluded to the importance of the coefficient of relative risk aversion in determining the optimal policy response to climate change.
http://www.mapleleafweb.com/forums/topic/24202-what-is-the-correct-value-of-climate-sensitivity/?p=1069893

I used a coefficient of 1. However, I'm a bit uncomfortable with using a coefficient of 1 or greater, because then it becomes difficult to explain why humans will occasionally make decisions that increase their chances of dying for finite gain (example: people go skydiving).

If a person has constant relative risk aversion less than 1, then their utility function will be a positive affine transformation of C^β, where 1-β is the coefficient of relative risk aversion. Suppose that a person is indifferent between taking no risks and taking a risk which has an α chance of killing the person and a 1-α chance of increasing the person's consumption by ΔC. Then
C^β = (1-α)*(C+ΔC)^β

If α and ΔC are relatively small, then taking a taylor approximation gives:
C^β = (1-α)*C^β*(1+ΔC/C)^β
=> 1 = (1-α)*(1+βΔC/C)
=> 0 = -α + βΔC/C
=> β = C*(α/ΔC)

Now ΔC/α should be the statistical value of life. For the USA, this is approximately $9.4 million (http://www.transportation.gov/sites/dot.gov/files/docs/VSL_Guidance_2014.pdf).

The USA's GDP per capita in 2015 is roughly $53,000. However, the USA's savings rate is ~18%, so only ~82% of this would count as consumption. In addition, it would make sense to take into account the future earnings of the individual, and not just the earnings over 1 year. If I use a discount rate of 4% (which is relatively consistent with interest rates over the past decade http://www.tradingeconomics.com/united-states/real-interest-rate-percent-wb-data.html)and I assume that the individual lives for 42 more years (which is USA life expectancy minus median age), then my value of C would be:

C = $53,000*0.82*(1 - 0.04^42)/0.04 = $1086500.

So β = $1086500/$9400000 = 0.1156.

Which suggests that the coefficient of relative risk aversion is roughly 0.8844.

Still pretty close to 1 (so a logarithmic approximation likely isn't that bad), but less than 1.

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so in regards those Chinese pledges and the projected results therein,

So you trust the Chinese communist government to honor their pledge, do you?

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So I thought I would try to roughly quantify the benefit of CO2 fertilization.
co2-fertilization-re-hatfie_med_hr.jpeg

From the above graph, it is clear that C3 plants benefit more than C4 plants from extra CO2. If we go from 400 to 440 ppm, the relative yield of wheat increases from 1.25 to 1.30 and the relative yield of corn increases from 1.04 to 1.05. This means that the yield of C3 plants increases by 4.00% and the yield of C4 plants increases by 0.96%.

If we look at the world's top 10 staples (https://en.wikipedia.org/wiki/Staple_food) only 2 of them are C4 plants (corn and sorghum), the rest are C3 plants. In terms of total yields by metric tones, C4 plants make up 27.2% of yields, and C3 plants make up 72.8%. The CO2 fertilization effect of going from 400 ppm to 440 ppm would be to increase global yields by approximately 0.272*4.00% + 0.728*0.96% = 1.787%.

Now apparently agriculture makes up 6% of global GDP (http://www.indexmundi.com/world/gdp_composition_by_sector.html). So this means that the CO2 fertilization effect of going from 400 ppm to 440 ppm would be to increase global GDP by 0.1072%. The global GDP in 2014 is approximately $107.5 trillion (https://www.cia.gov/library/publications/the-world-factbook/geos/xx.html). In 2005 dollars this is $91.3 trillion (using GDP deflators from https://research.stlouisfed.org/fred2/series/GDPDEF/#).

Go the CO2 fertilization effect of going from 400 ppm to 440 ppm is $97.87 billion per year. If I take the net present value (NPV) of this at 4% discount rate, I get $2.447 trillion.

Since it takes 2.13 Gt of carbon to increase atmospheric CO2 concentrations by 1 ppm, 40 ppm corresponds to 85.2 Gt of carbon, which is 312.4 Gt of carbon dioxide.

Dividing these two numbers suggest that a ton of CO2 emissions has a CO2 fertilization benefit of $7.83. Earlier I suggested that a Pigouvian tax of $22.39 per ton of CO2 would make sense based on the net effects of temperature change. Combining these two results suggest that a Pigouvian tax of $14.56 would make sense.

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For the sake of it, I thought I would attempt to ROUGHLY quantify the external costs of CO2 emissions due to ocean acidification and sea level rise.

Ocean Acidification:

This is a bit tricky. Molluscs are the main group of creatures that are harmed. Most species are relatively unaffected, and seaweed may benefit.
http://www.cell.com/trends/ecology-evolution/abstract/S0169-5347%2812%2900262-5?_returnURL=http%3A%2F%2Flinkinghub.elsevier.com%2Fretrieve%2Fpii%2FS0169534712002625%3Fshowall%3Dtrue

The closest thing I can find that attempts to quantify the costs of ocean acidification is here:
http://link.springer.com/article/10.1007/s10584-011-0383-3

Unexpectedly, Richard Tol is an author, and the findings are that the costs will reach ~$100 billion by 2100 under BAU relative to 2012 ocean acidificiation (which I assume means RCP 8.5). If I assume a roughly linear cost per year from 0 in 2012 to $100 billion in 2100 and use a 4% discount rate, the NPV this effect of ocean acidification is $636 billion.

390806.png

RCP 8.5 has on average 20 Gt of Carbon per year emissions from 2012 to 2100 (which is roughly 73 Gt of CO2 per year). This means that total emissions over this period are roughly 6453 Gt.
Dividing the two numbers suggests that the external cost of CO2 due to ocean acidification is roughly 9.9 cents per ton of CO2.

Sea Level Rise:

I need some estimate for the value of land as a function of time. Since 0.5 m / century of sea level rise is very slow, I only need to consider the value of the land, not all the buildings and stuff on top if it (since the life expectancy of buildings is short relative to the time period of sea level rise). In the USA, the value of pasture land is $1300 per acre (http://www.agweb.com/land/farmland-value-guide/). Obviously, there are different types of land (some more or less valuable), but I'll assume land has this value on average.

I'll assume that the value of land is roughly proportional to GDP per capita (to take into account the fact that the USA is richer than most of the world and the fact that the world gets richer over time, so land will be more valuable in the future). In 2013, USA GDP per capita was $53000, where as the world average in terms of PPP was $13000. So I'll assume that the average value of land on Earth is roughly $319. Furthermore, I'll assume that this increases by approximately 2.5% per year (which is roughly the real GDP per capita growth rate of Earth).

Next, I need to get some rough estimate of how much sea levels are affected by CO2 emissions over time. According to IPCC AR5, sea levels will rise by roughly half a meter by 2100. However, the amount of sea level rise varies based on emission scenario, and the difference in sea level rise between RCP 2.6 and RCP 8.5 is about half a meter. RCP 2.6 has roughly 5 Gt carbon / year from 2012-2070. This means that the difference in emissions between RCP 8.5 and RCP 2.6 between 2012 and 2100 is roughly 5390 Gt CO2. I'll assume that this amount of emissions results in a sea level rise of roughly half a meter per century.

According to http://www.climate.org/topics/sea-level/, 0.66 m of sea level rise corresponds to a loss of 26000 square kilometers. If I assume a roughly linear relationship between sea level rise and lost land, then 0.5 m of sea level rise corresponds to a loss of 4818645 acres. Using this information, I can estimate the net present value of land lost due to sea level rise due to this 5390 Gt of emitted CO2 using a discount rate of 4% (I consider losses until 2300 in this case since most of the costs of sea level rise are quite delayed). I get a net present value of $76.2 billion.

Dividing the net present value of the costs by the emissions suggests that the external cost of CO2 emissions due to sea level rise is 1.4 cents per ton of CO2.

So overall, sea level rise + ocean acidification suggests and external cost of like 11 cents per ton of CO2. That is tiny.

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Which suggests that the coefficient of relative risk aversion is roughly 0.8844.

Still pretty close to 1 (so a logarithmic approximation likely isn't that bad), but less than 1.

what a moronic post... notwithstanding your continued inability to simply present your interpretation/understanding in plain English... nobody here cares about your math "wizardry"! Here's a clue: you could state just what relevance determining a risk aversion factor has in terms of policy determinations... you know... like trying to reduce possible bias in policy decisions relative to the uncertainty of impact/affect of adverse climate change condition or estimates! Notwithstanding the most questionable interpretation that might presume to qualify a constant risk aversion to all climate impacts, particularly those more distant into the future, those with greater uncertainty. Instead... you prattle on with totally unnecessary math - who cares!

you could also speak to the degree to which risk aversion is utilized by governments today in setting policy... or drafting future policy considerations - for example, my understanding is that, today, the U.S. government guidelines speak to factoring a position of risk neutrality in related analysis. Equally, you could present examples of risk aversion findings. typically low(er) levels of risk aversion, used by economists and justifications to that end... in PLAIN ENGLISH - no math required!

more pointedly to your offered qualification to an individuals personal risk level, under what premise do you assume governments would/should/could behave as individuals with respect to risk? Notwithstanding the level of individual person risk aversion varies significantly based upon an individual's own characteristic makeup and the degree of uncertainty in any given situation.

.

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So you trust the Chinese communist government to honor their pledge, do you?

you should save yourself further embarrassment and read up a little as to just what the current Chinese government is doing today... voluntarily. But since you asked, you know all those occasions where Harper has made commitments toward target emission reductions... did you trust him each time he lined up yet another pledge? And if so, care to comment on how your 'trust in Harper' has been affected by his unwillingness to meet or even legitimately work towards those pledges made? :lol:

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So I thought I would try to roughly quantify the benefit of CO2 fertilization.

you're still flogging this? This time, just how heavily are you relying upon your favoured non-real world, isolated, enclosed greenhouse/chamber experiments here? :lol: Where's your quantification factoring precipitation, biotic stresses of weeds, insects and diseases, nitrogen factors, soil conditions, nutrient management, acclimation aspects, etc., etc., etc.? You know... all those real world thingees that influence staple crop yields.

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you should save yourself further embarrassment and read up a little as to just what the current Chinese government is doing today... voluntarily. But since you asked, you know all those occasions where Harper has made commitments toward target emission reductions... did you trust him each time he lined up yet another pledge? And if so, care to comment on how your 'trust in Harper' has been affected by his unwillingness to meet or even legitimately work towards those pledges made? :lol:

Did you trust Trudeau when he made commitments he never intended to keep? I know the Chinese government is building hundreds of coal fired power plants. I know that they have, over the years, repeatedly violated treaties and agreements. And I know the only way you're going to be able to accurately know what their CO2 levels are is whatever they decide to tell you.

But then reality has never played any part in your thinking on this subject.

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Did you trust Trudeau when he made commitments he never intended to keep? I know the Chinese government is building hundreds of coal fired power plants. I know that they have, over the years, repeatedly violated treaties and agreements. And I know the only way you're going to be able to accurately know what their CO2 levels are is whatever they decide to tell you.

But then reality has never played any part in your thinking on this subject.

reality? You've clearly shown your reality is peppered with baseless and unsubstantiated statements along with outright false denier-laced talking points on subjects you know little to nothing about.

on the subject at hand, you refuse to answer my last questions to you concerning trust in Harper's failed iterative emission reduction pledges... so, of course, you deflect/distract!

to be clear here: I am no apologist for any country in regards to their emission levels; I also don't feel any pledges being made are adequate to what's needed. That being said, towards the "reality" you presumed to speak from, this handy graphic puts perspective into historical emissions for the world's 2 largest emitters (and no... as related previously to the "moderator" in the past, I can't supply the exact source other than the link attached to the graphic... because you can't search directly within wordpress... it's simply a link I have bookmarked). Does the graphic below absolve China for the level of it's world-leading emissions today? Of course not; however, it does speak to what China is now going through today (via its mega-modernization) relative to a prior 50+ years in the U.S..

china-us-carbon-emissions.jpg?w=594&h=59

you've made the same unsubstantiated statements/claims about new Chinese coal-plant builds in the past... and you simply choose to repeatedly ignore the countering replies. What you, apparently, purposely ignore is the Chinese emphasis on nuclear... or the Chinese emphasis on solar/wind. You also don't speak to the replacement aspect of Chinese coal plants... that a significant number of new coal plants are new higher efficient plants, many that are outright replacing the shuttering of older less efficient plants; notwithstanding the emphasis China is/has placed on sequestration towards commercially deployed coal-CCS plants. But more directly to that oft-repeated false talking point about the number of Chinese coal-plants going up (it's usually spoken in terms of "one or two (or more) new coal plants per week", there's a statistic that speaks to China adding a new wind-turbine every 20 seconds!

but once again, directly to your false talking point concerning the number of Chinese coal plants:

Let's start with the first bit of hot air to fill this bubble, the one I hear over and over again: Isn't China building a new coal plant (or two or three or four) every week? No they aren't. While it's true China has been on a spree over the past decade it turns out that the industry is now running on fumes (no pun intended). In 2011 a full one-third of coal plants approved in the country were stalled and investment in new coal plants weren't even half the level they were in 2005. Even better, China actually closed down over 80 GW of coal plants between 2001-2010 and is planning to phase out another 20 GW. To put that in perspective that's roughly the size of ALL electricity sources in Spain home to the world's 11th largest electricity sector. So next time someone tells you China is building a new plant every week, you can pleasantly respond: bullS*%@!

if nothing else, China is being pressed down this path because of the world coverage/profile on it's mega-pollution in its largest cities (you know, the same thing the U.S. went through prior to such things as the U.S. Clean Air Act)... notwithstanding the building resentment of its own people to the staggering pollution impact being felt. A significant part of past treaties has been verification of each countries claimed emission levels... whether you presume to question the integrity of any country in the publication of their emission levels/trajectories, there are alternative (satellite based) monitoring approaches. If nothing else, countries will be monitoring each other... or organizations will become the policing "watch-dogs"; examples:

ESA’s European environment satellite ENVISAT

Carbon Monitoring Satellite - CarbonSat

IBUKI & GOSAT-2

Orbiting Carbon Observatory (OCO-2)

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I also don't feel any pledges being made are adequate to what's needed.

Let's ignore the rest and focus on this. Even the pledges, which are unlikely to be met, are inadequate. I agree, by the way. It's futility squared. Even if we accept that Co2 emissions are responsible we are not going to reduce emissions fast enough, no matter how much we stifle our economies, to make much, if any difference to global warming. What is going to make a difference is technological innovation and advancement. Kathleen Wynne isn't going to have any impact on CO2 emissions, Elon Musk will, though.

Yet instead of putting money into research you, and your precious NDP and Liberals, are determined to have us squander billions and billions on a pointless carbon taxing scheme, or cap and trade, depending on which might succeed, just like the Ontario and Quebec liberal governments. The Europeans have spent a vast fortune thus far to mostly persuade dirty industries to relocate to the third world while heavily taxing the rest to the detriment of their economies. And your continued unbounded, even rabid enthusiasm for this stuff is absurd and ridiculous.

Technology and doing what we can to prepare for a warming globe makes far more sense than your continued silliness about shaming individual countries into the pretense of CO2 emissions reductions through cap and trade and carbon taxation.

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Waldo, you criticize me of not using 'plain English', while in your response using unclear Waldo-speak, which is difficult to follow. It is very ironic.

you could state just what relevance determining a risk aversion factor has in terms of policy determinations

I already did, in other posts, which I linked to.

you prattle on with totally unnecessary math - who cares!

How are you supposed to determine what policy makes sense with respect to climate change if you don't attempt to quantify things and compare the costs and benefits? Are we supposed to use 'discovery math' and just make decisions based on subjective feelings?

You say no one cares, yet I have an open invitation from Judith Curry to make a guest post on her blog on the issue of relative risk aversion.

my understanding is that, today, the U.S. government guidelines speak to factoring a position of risk neutrality in related analysis.

This is true, for the most part. Although they do perform some sensitivity analysis in cost benefit analyses.

more pointedly to your offered qualification to an individuals personal risk level, under what premise do you assume governments would/should/could behave as individuals with respect to risk?

Acceptance of anonymity principle + separability axiom. I explained this in earlier in posts I linked to. Not my fault if you don't want to read them.

you're still flogging this? This time, just how heavily are you relying upon your favoured non-real world, isolated, enclosed greenhouse/chamber experiments here?

Your continued science denial of the CO2 fertilization effect is noted.

Edited by -1=e^ipi

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I read the DICE 2013 manual today: http://www.econ.yale.edu/~nordhaus/homepage/documents/DICE_Manual_100413r1.pdf

I wanted to point out a few interesting things:

- The real interest rate gradually decreased under the model over time. It started slightly above 5% and gradually decreased to slightly below 4% by 2100. This suggests that a reasonable discount rate is likely somewhere between 4% and 5%.

- The optimal carbon dioxide emission tax was calculated to be $17 in 2015. This optimal increased exponentially by roughly 2.6% per year after 2015 (which is roughly the growth rate of real GDP per capita).

- The model used an ECS of 2.9 C and determined that the optimal Pigouvian tax lead to a temperature anomaly slightly greater than 3C relative to pre-industrial levels, and temperatures start to decrease around 2130. Atmospheric CO2 peaks slightly above 600 ppm around 2120.

Edit: Found this study which determined the social rate of time-preference to be around 4% (http://www.envplan.com/fulltext_temp/0/a170199.pdf). And here, the coefficient of relative risk aversion to be around 1.4 (http://onlinelibrary.wiley.com/doi/10.1111/j.1475-5890.2005.00010.x/abstract).

Edited by -1=e^ipi

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