Juan Carlos Ciscar

The integration of PESETA sectoral economic impacts into the GEM-E3 Europe model: methodology and results.

The PESETA project has estimated the physical effects of climate change in Europe for the following impact categories with a market valuation: agriculture, river floods, coastal systems and tourism. Four alternative scenarios of future climate change have been considered. The computable general equilibrium (CGE) GEM-E3 model for Europe has been used to integrate the PESETA damages under a consistent economic framework. The approach followed has been to assess the effects of future climate (as of 2080s) on today’s economy. This article details the way each sectoral impact has been integrated into the CGE model. The EU welfare loss is estimated to be in a range of 0.2% to 1%, depending on the climate future and the projected sea level rise. Results show that the Southern Europe region appears as the most vulnerable area to climate change. Impacts in coastal systems, agriculture and river floods determine the overall and regional pattern of impacts within Europe.

A Tale of Tails: Uncertainty and the Social Cost of Carbon Dioxide

Recent thinking about the economics of climate change has concerned the uncertainty about the upper bound of both climate sensitivity to greenhouse gases and the damages that might occur at high temperatures. This argument suggests that the appropriate probability distributions for these factors may be fat-tailed. The matter of tail shape has important implications for the calculation of the social cost of carbon dioxide (SCCO2). In this paper a probabilistic integrated assessment model is adapted to allow for the possibility of a thin, intermediate or fat tail for both (i) the climate sensitivity parameter and (ii) the damage function exponent. Results show that depending on the tail shape of the climate sensitivity parameter the mean SCCO2 rises by 29 to 85 percent. Changes in the mean SCCO2 due to the adjustments to the damage function alone range from a reduction of 7 percent to a rise of 12 percent. The combination of both leads to rises of 33 to 115 percent. Greater rises occur for the upper percentiles of the SCCO2 estimates. Given the uncertainties in both the science and the economics of climate change different tail shapes deserve consideration due to their important implications for the range of possible values for the SCCO2.

Prospective Analysis of Beyond Kyoto Climate Policy: a Sequential Game Framework.

This article proposes a sequential game methodology to analyse the long-term climate policy prospects. Players can sequentially choose the best policy, among a series of policy options, while reacting to past moves of the other players. In order to illustrate the game methodology, a numerical optimisation exercise is made, based on a simple integrated assessment model. The non-cooperative equilibrium arising from a five-stage sequential game with two large players (Annex B and non-Annex B regions), which tries to replicate the Kyoto and beyond Kyoto scenarios, is studied.

Modeling the Impact of Genetic Screening Technologies on Healthcare: Theoretical Model for Asthma in Children

AbstractBackground and objective: This study focuses on the potential impact of genetic screening technologies on healthcare. Genetic screening for asthma in children was chosen as a case study to explore the cost effectiveness of applying early genetic screening to infants, and preventive treatment to the population at risk. Early intervention could prevent progression and facilitate clinical management of the disease. From the elite group of genetic markers that have been associated with asthma-related phenotypes, ADAM33 was the first published candidate gene detected by a positional cloning approach, marking the entry of asthma research into the genomic era. The model was, therefore, initially set for an ex ante analysis of the cost effectiveness of applying the preventive program to an infant population at risk, i.e. infants presenting wheezing episodes during the first year of life, and the ADAM33 ST+7 genetic marker, with the idea of expanding to further markers and their combinations lat a later date. Methods: In accordance with the US National Heart, Lung, and Blood Institute, four categories of asthma were considered. A Markov model was constructed, consisting of six mutually exclusive disease states (including healthy and dead states) with a simulation horizon of 100 years and a cycle length of 1 year.We define a scenario where early genetic screening was applied to infants presenting wheezing episodes during the first year of life and a preventive treatment to those children within this group who tested positive for selected ADAM33 polymorphism (ST+7). The cost-effectiveness analysis was performed from the third-party payer and patient perspective after year 6. We applied our model to a hypothetical cohort of 100 European infants. Results: The number of quality-adjusted life-years (QALYs) gained during the 6 years was 1.483, and the incremental cost-effectiveness ratio per QALY gained was €10 100/QALY. A sensitivity analysis was carried out that varied the discount rate and cost of genetic testing, and considered two different transition matrices for the preventive program. Three main conclusions were drawn from the sensitivity analysis. Firstly, if the discount rate for both cost and health outcomes is increased by 2%, the cost effectiveness of the preventive program does not vary significantly. Discounting costs and benefits at 5%, the preventive program appears cost effective (€11 100/QALY). Secondly, if the cost of genetic testing is increased to €100, the cost effectiveness of the preventive program remains within the limits of cost effectiveness. Thirdly, the cost of genetic screening, together with transition probabilities between health states, will determine the cost effectiveness of applying a preventive program based on genetic information. Conclusions: Preventive treatment based on an early genetic screening of those children who present wheezing episodes during the first year of life, with treatment applied to those who test positive for the asthma-associated genetic marker ADAM33 ST+7, is theoretically cost effective. The model is a valuable tool for the ex ante assessment of the cost effectiveness of preventive schemes based on genetic screening. The value of modeling prior to clinical trials lies in informing study design and setting priorities for future research.

Economic Convergence and Climate Policy.

Abstract This paper addresses the relevance of the economic convergence hypotheses between the developing and the developed world in international greenhouse gas (GHG) emissions negotiations. The results are based on a two-region (the OECD and the rest of the world, ROW) neo-classical growth model with exogenous technical progress, different technological diffusion patterns, and a set of geophysical relationships that consider an environmental externality linked to GHG emissions. A game framework is taken into account in the model to capture the strategic interactions between agents. The outcome of the negotiations seems indeed to depend on the economic convergence hypotheses. Faster economic growth of the ROW countries would encourage them to further mitigate carbon emissions.