Odd Godal

METRICS OF CLIMATE CHANGE: ASSESSING RADIATIVE FORCING AND EMISSION INDICES

In this paper, we review existing and alternative metrics of climate change, with particular emphasis on radiative forcing and global warming potentials (GWPs), in terms of their scientific performance. Radiative forcing is assessed in terms of questions such as the utility of the concept, uncertainties and sensitivity to key assumptions. The assessment of emission indices focuses on the climate and other resulting impacts (end points) against which emissions are weighted; the extent to which (and how) time dependence is included, with regard to both emission control and impact; how cost issues are dealt with; and the sensitivity of the metrics to various assumptions. It is concluded that the radiative forcing concept is a robust and useful metric of the potential climatic impact of various agents and that there are prospects for improvement by weighing different forcings according to their effectiveness. We also find that although the GWP concept is associated with serious shortcomings, it retains advantages over any of the proposed alternatives in terms of political feasibility. Alternative metrics, however, make a significant contribution to addressing important issues, and this contribution should be taken into account in the further development of refined metrics of climate change.

Climate implications of GWP-based reductions in greenhouse gas emissions

Possible implications of a GWP-based implementation of GHG reductions on future man-made climate change are explored. Abatement scenarios are established in terms of “CO2 equivalents” using GWP100; one scenario reducing CO2 only, and one reducing short-lived gases, mainly CH4. Future temperature changes are calculated by using a simple climate model. Equal emission scenarios in terms of CO2 equivalents do not imply equivalent climate responses and large differences in the magnitude and rate of temperature change are calculated.

Greenhouse gas taxation and the distribution of costs and benefits: the case of Norway

Abstract Already in 1991, as part of a unilateral greenhouse gas abatement policy, the Norwegian authorities introduced taxes on emissions of carbon dioxide (carbon taxes). This paper gives an empirical description of how the differentiated carbon tax across fuels gives rise to large variations in how the various sectors of the economy are affected by this tax scheme. Furthermore, we indicate how a cost-effective regulation of the greenhouse gas emissions in Norway can change the distribution of costs across the various sectors. The primary aim of this article is to explore the advantages and disadvantages of a uniform regulation scheme for various sectors including all greenhouse gases listed in the Kyoto Protocol. Due to the lack of reliable data on abatement costs our approach is static, keeping emissions constant. The results show in general that private households and firms in the production of oil and gas would gain from such a change, whereas the energy-intensive process industry will experience losses under all circumstances. The findings add support to the explanations of the positions taken by parties that have traditionally sought to protect this industry and that repeatedly oppose measures that would regulate emissions on a more uniform basis.

Carbon Trading with Imperfectly Observable Emissions

The Kyoto Protocol foresees emission trading but does not yet specify verification of (uncertain) emissions. This paper analyses a setting in which parties can meet their emission targets by reducing emissions, by investing in monitoring (reducing uncertainty of emissions) or by (bilaterally) trading permits. We derive the optimality conditions and carry out various numerical simulations. Our applications suggest that including uncertainty could increase compliance costs for the USA, Japan and the European Union. Central Europe and the Former Soviet Union might be able to gain from trading due to higher permit prices. Emissions trading could also lower aggregate uncertainty on emissions.

Permit Trading: Merely an Efficiency‐Neutral Redistribution Away from Climate‐Change Victims?

In this paper, we present a climate‐policy game with international emissions trading, where governments first select their amounts of emissions permits. These permits are transferred to firms, and then traded competitively on an international market. Compared with a game without trading, we find that the potential efficiency gains from permit trading, which have been identified in other studies, are totally undone if governments also employ a tax or subsidy on domestic emissions. The only effect of permit trading in this case is a redistribution of income away from those most affected by climate change.

Gradient differences and bilateral barters

Exchange is modelled here as iterated bilateral barters, each fairly myopic and driven merely by gradient differences. Under weak conditions, repeated transactions carry the economy to market equilibrium, supported by clearing prices. A main feature is that agents, in the interim, are allowed non-admissible, possibly speculative, but sharply penalized positions.