Ian Sue Wing

Absolute versus intensity-based emission caps

Abstract Cap-and-trade systems limit emissions to some pre-specified absolute quantity. Intensity-based limits, that restrict emissions to some pre-specified rate relative to input or output, are much more widely used in environmental regulation and have gained attention recently within the context of greenhouse gas (GHG) emissions trading. In this paper we provide a non-technical introduction to the differences between these two forms of emission limits. Our aim is not to advocate either form, but to elucidate the properties of each in a world where future emissions and GDP are not known with certainty. We argue that the two forms have identical effects in a world where future emissions and economic output (i.e. GDP) are known with certainty, and show that outcomes for marginal costs, abatement, emissions and welfare diverge only because of the variance of actual future GDP relative to its forecast expectation.

Economic Consequences of Pollinator Declines: A Synthesis

This paper surveys the literature on pollinator declines and related concerns regarding global food security. Methods for valuing the economic risks associated with pollinator declines are also reviewed. A computable general equilibrium (CGE) approach is introduced to assess the effects of a global catastrophic loss of pollinators. There appears to be evidence supporting a trend towards future pollinator shortages in the United States and other regions of the world. Results from the CGE model show economic risks to both direct crop sectors and indirect noncrop sectors in the economy, with some amount of regional heterogeneity.

Confronting the challenge of integrated assessment of climate adaptation: a conceptual framework

Key limitations of integrated assessment models (IAMs) are their highly stylized and aggregated representation of climate damages and associated economic responses, as well as the omission of specific investments related to climate change adaptation. This paper proposes a framework for modeling climate impacts and adaptation that clarifies the relevant research issues and provides a template for making improvements. We identify five desirable characteristics of an ideal integrated assessment modeling platform, which we elaborate into a conceptual model that distinguishes three different classes of adaptation-related activities. Based on these elements we specify an impacts- and adaptation-centric IAM, whose optimality conditions are used to highlight the types of functional relationships necessary for realistic representations of adaptation-related decisions, the specific mechanisms by which these responses can be incorporated into IAMs, and the ways in which the inclusion of adaptation is likely to affect the simulations’ results.

Economic Consequence Analysis of the ARkStorm Scenario

AbstractThe business interruption (BI) impacts of ARkStorm, a severe winter storm scenario developed by the U.S. Geological Survey and partners, is estimated. BI stems from losses of building function, productivity of agricultural land, and lifeline services. A dynamic computable general equilibrium model of the California economy is developed to perform this economic consequence analysis. Economic resilience in the form of input and import substitution is inherent in the model’s equilibrium solution, and the model parameterization is adjusted to reflect other forms of resilience such as production recapture. Varying assumptions about the timing and source of funds for reconstruction results in a range of recovery paths. Five years after the storm, flood-induced building damage is the overwhelming source of gross domestic product (GDP) losses, timely and partially externally funded reconstruction mitigates impacts by approximately 50%, and the economy is not guaranteed to return to its baseline GDP trajec...

Coal’s medium-run future under atmospheric greenhouse gas stabilization

We assess the future of coal under alternative climate stabilization regimes, investigating how the quantity and location of future coal production, trade and use depends upon five factors: the supply-side constraint of resource depletion, diversification and deepening of international trade, economic growth, trends in energy intensity, and the availability of coal-fired carbon-free electric generation technology (IGCC-CCS). Using the Phoenix computable general equilibrium model of the world economy, we find that coal is sensitive to demand-side assumptions about economic growth and energy-saving structural or technological change. In a 550 ppm stabilization emission tax scenario, the gobal coal industry initially declines sharply and then rebounds, in 2050 reaching roughly the same size as it is today—but only if IGCC-CCS is available by 2020. Under alternative stabilization regimes, IGCC-CCS penetration is a key influence on production and imports in major coal regions, where it interacts with extraction costs driven by the rate of depletion relative to trade partners.