Analysis of Copenhagen: Degrees of Reckoning

Editor’s Note: This is a series of analysis and observations from the ground in Copenhagen. During the 15th annual climate change conference, Brookings expert Nathan Hultman tracks the negotiations, offering insight into the governance process.

On Friday, the big news at Copenhagen was the release of a draft text for negotiation compiled by the session chairs. This draft text addresses two central questions for international climate policy. First, it opens the question of a long-term temperature target, and sets a goal of cutting emissions in developing countries by 25-40 percent by the year 2020. Both areas have caused some uproar among the various delegations, but in this posting I focus on the arguments about the temperature target, a vociferous disagreement that too many people must seem hairsplitting in the extreme: 1.5 or 2 degrees?

Yet that 0.5 degrees Celsius is unquestionably important. The temperature target remains a topic of considerable debate, and has caused a great deal of confusion in the wider public debates at home. The idea behind a temperature target is fairly simple: we know that that the damages from climate change—damages to human societies, economies, and natural ecosystems—will increase with increasing temperature, in proportion to the amount of greenhouse gases in the atmosphere (though not necessarily linearly or uniformly across geography). We also know that, in relatively constrained time periods like a decade, the more we try to reduce emissions, the costlier it will be.

Any economically minded decisionmaker might therefore wish simply to balance the costs versus the benefits and find the optimal level of emissions. Unfortunately, this approach is impossible to execute in practice. Why? First, expenditures to reduce emissions now do not necessarily accrue benefits (i.e. avoided climate change) until several years or decades into the future. While in theory one can evaluate both by calculating a net present value (basically, adjusting future cash flows downward to reflect the time value of money), it is not clear what discount rate should be used to do this. Second, it is not clear how we should balance costs today against costs to future generations. Third, it is not clear how we should balance costs for a person in the Netherlands in 15 years against costs for a person in central Tanzania in 15 years. Fourth, the estimates of the costs of installing new technologies to reduce emissions are more certain than the estimates of climate damages, requiring a wider range of scenarios to be considered on the damage side. Finally, the damages themselves come in many forms, not all of which are easily reconciled: calculable economic costs, yes, but also human lives, human health, ecosystem loss, species extinctions—and, importantly, the disparate cultures around the world completely confound an easy collapse of all of these dimensions into a single economic cost figure.

The upshot of this is that a simple cost-benefit reckoning is at best impossible and at worst highly deceptive. As such, given the existence of real climate risks, an alternate, less-elegant approach is to break up “climate change” into a large number of specific changes that scientists can evaluate and try to figure out the risks of unpleasant climate change in each of these dimensions for a variety of possible temperatures. For each specific change—for example, Amazon dieback, collapse of the Greenland ice sheet, reduction of South Asian monsoon, or extinction of butterfly species—scientists try to estimate the likelihood of each bad event happening for 1 degree, 2 degrees, 3 degrees, etc. Then, if we set forth all the risks that we have identified, and perform this exercise for each, we can expect that some systems will be more vulnerable perhaps at 1 degree, and a few might not be vulnerable until 4 degrees. But on balance, we might be able to evaluate the set, and identify where the risks start to seem too unpleasant—in terms of human suffering and possible non-reversible bad outcomes—that we as a global community decide we would like to avoid that level of damage.

A temperature target, such as 2 degrees, is therefore not selected arbitrarily. Instead, it is the result of taking what we are reasonably confident we do understand—namely, estimates of how climate impacts rise with increasing temperature—and make a collective judgment on how much risk is too much.

Now we return to the draft text. A few years ago, setting a 2-degree target was seen as ambitious, and there was a sense of innovation when the EU adopted this approach. However, much of the very recent scientific evidence has pointed to a world that may, in fact, be more sensitive than had been previously thought (see Climate Science Report or Key Messages from the Congress). Many countries that are particularly vulnerable to climate change, such as low-lying island states, and the poorest developing countries, have therefore begun arguing forcefully for a 1.5-degree target. No agreement has yet been struck. In one sense, this is the crux of climate policy: How much risk are we as a global community willing to take, and how do we exercise our judgment under uncertainty? On the other hand, from a practical perspective, whether 2 degrees or 1.5, we know that emissions must decrease dramatically from current levels. So whether one finds the 0.5 degree to be excessively hairsplitting or not, discussions on ways to encourage emissions reductions (targets, innovation, forests, etc.) will necessarily continue.

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