Economic Assessment of the Damages Caused by Global Warming

• Main Author: van Kooten, G. Cornelis
• Format: Text
• Language: English
• Published: 2012
• Subjects: Article; Arctic; Climate change; Global warming; Human health
• Online Access: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC7120647/; https://doi.org/10.1007/978-94-007-4988-7_7

Damages avoided – the principal benefit of mitigating climate change – are investigated in this chapter, particularly the potential adverse impacts on the primary sectors, biodiversity and human health. A review of studies indicates that climate change is unlikely to have much impact on agriculture and forestry; projected climate change will increase productivity in some regions while reducing it in others, leading to a redistribution of land rents with little impact on overall output. When CO(2) fertilization is taken into account, there might even be an overall increase in primary sector productivity that results in more undisturbed land, thus protecting biodiversity. Other findings in this chapter also run counter to current shibboleths: The biggest threat to polar bears is hunting, not climate change; current trends in Arctic ice extent are not without historical precedent; sea level rise is not an imminent threat; extreme weather events are not increasing; malaria is not only a tropical disease; and human health is a function of income, not climate, with bottom-up models using UN data predicting that death rates from almost all causes will be lower with projected global warming than without it. Meanwhile, integrated assessment models (IAMs) simply assume damages are an arbitrary function of temperature; upon balancing discounted costs and benefits, IAMs can be used to find an optimal path (usually of a carbon tax or emissions cap) for mitigating climate change. It is shown that different assumptions regarding damages, the discount rate, and/or the probability of catastrophic damage can be used to justify completely different policies for addressing global warming. Therefore, a carbon tax that is contingent on the temperature in the troposphere above the tropics – where the earliest indication of global warming is predicted to occur – is considered to be the preferred policy strategy as it should appeal to global warming proponents and skeptics alike. Finally, the Kaya identity is used to demonstrate the ...