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112-560: Since the late 1990s, the EMF has made contributions to the economics of climate change , as reflected in the reports of the Intergovernmental Panel on Climate Change (IPCC) and in the field of integrated assessment modeling more generally. John Weyant is the current director of the EMF. The EMF was convened in 1976 over concerns that the insights that large-scale energy models could provide policymakers were being overshadowed by

224-464: A rise in sea levels due to the expansion of water as it warms and the melting ice sheets on land. Other effects on oceans include sea ice decline , reducing pH values and oxygen levels , as well as increased ocean stratification . All this can lead to changes of ocean currents , for example a weakening of the Atlantic meridional overturning circulation (AMOC). The main cause of these changes are

336-406: A CBA framework, the negative and positive impacts associated with a given action are converted into monetary estimates. This is also referred to as a monetized cost–benefit framework. Various types of model can provide information for CBA, including energy-economy-environment models ( process models ) that study energy systems and their transitions. Some of these models may include a physical model of

448-482: A bigger impact. The impacts of climate change on nature are likely to become bigger in the next few decades. The stresses caused by climate change, combine with other stresses on ecological systems such as land conversion, land degradation , harvesting, and pollution. They threaten substantial damage to unique ecosystems. They can even result in their complete loss and the extinction of species. This can disrupt key interactions between species within ecosystems. This

560-517: A cascade of effects. This remains a possibility even well below 2 °C (3.6 °F) of warming. A 2018 study states that 45% of environmental problems, including those caused by climate change, are interconnected. This increases the risk of a domino effect . Further impacts may be irreversible, at least over the timescale of many human generations. This includes warming of the deep ocean and acidification. These are set to continue even when global temperatures stop rising. In biological systems,

672-409: A cost per unit of effectiveness. For example, cost per tonne of GHG reduced ($ /tCO2). This allows the ranking of policy options. This ranking can help decision-maker to understand which are the most cost-effective options, i.e. those that deliver high benefits for low costs. CEA can be used for minimising net costs for achieving pre-defined policy targets, such as meeting an emissions reduction target for

784-440: A counterfactual where no climate change occurs. The global economy and per capita income would still grow relative to present, but the global annual damages would reach about $ 38 trillion (in 2005 International dollars ) by 2050, and increase a lot further under high emissions. In comparison, limiting global warming to 2 °C would by 2050 cost about $ 6 trillion per year, or far less than the anticipated annual damages, emphasizing

896-401: A database (usually very detailed) consistent with these model equations. The equations tend to be neoclassical in spirit, often assuming cost-minimizing behaviour by producers, average-cost pricing, and household demands based on optimizing behaviour. Integrated assessment models (IAMs) are also used make aggregate estimates of the costs of climate change. These (cost-benefit) models balance

1008-515: A decision-maker or other user. These alternatives usually also include a "baseline" or reference scenario for comparison. "Business-as-usual" scenarios have been developed in which there are no additional policies beyond those currently in place, and socio-economic development is consistent with recent trends. This term is now used less frequently than in the past. In scenario analysis, scenarios are developed that are based on differing assumptions of future development patterns. An example of this are

1120-480: A fire starts in an area with very dry vegetation, it can spread rapidly. Higher temperatures can also lengthen the fire season. This is the time of year in which severe wildfires are most likely, particularly in regions where snow is disappearing. Weather conditions are raising the risks of wildfires. But the total area burnt by wildfires has decreased. This is mostly because savanna has been converted to cropland , so there are fewer trees to burn. Prescribed burning

1232-465: A given sector. CEA, like CBA, is a type of decision analysis method. Many of these methods work well when different stakeholders work together on a problem to understand and manage risks. For example, by discussing how well certain options might work in the real world. Or by helping in measuring the costs and benefits as part of a CEA. Some authors have focused on a disaggregated analysis of climate change impacts. "Disaggregated" refers to

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1344-870: A high risk at 2.5 °C (4.5 °F). It is possible that some tipping points are close or have already been crossed. Examples are the West Antarctic and Greenland ice sheets, the Amazon rainforest, and warm-water coral reefs. Tipping points are perhaps the most dangerous aspect of future climate change, potentially leading to irreversible impacts on society. A collapse of the Atlantic meridional overturning circulation would likely halve rainfall in India and lead to severe drops in temperature in Northern Europe. Many tipping points are interlinked such that triggering one may lead to

1456-990: A highly aggregated way. Compared to other climate-economy models (including process-based IAMs), they do not have the structural detail necessary to model interactions with energy systems, land-use etc. and their economic implications. A more recent modelling approach uses empirical, statistical methods to investigate how the economy is affected by weather variation. This approach can causatively identify effects of temperature, rainfall and other climate variables on agriculture, energy demand, industry and other economic activity. Panel data are used giving weather variation over time and spatial areas, eg. ground station observations or (interpolated) gridded data. These are typically aggregated for economic analysis eg. to investigate effects on national economies. These studies examine temperature and rainfall, and events such as droughts and windstorms. They show that for example, hot years are linked to lower income growth in poor countries, and low rainfall

1568-525: A lot year by year. This makes it difficult to determine a trend, and record highs and record lows have been observed between 2013 and 2023. The general trend since 1979, the start of the satellite measurements , has been roughly flat. Between 2015 and 2023, there has been a decline in sea ice, but due to the high variability, this does not correspond to a significant trend. Globally, permafrost warmed by about 0.3 °C between 2007 and 2016. The extent of permafrost has been falling for decades. More decline

1680-477: A low stabilization target, e.g., 450 parts per million (ppm) CO 2 . To put it differently, stringent near-term emissions abatement can be seen as having an option value in allowing for lower, long-term stabilization targets. This option may be lost if near-term emissions abatement is less stringent. On the other hand, a view may be taken that points to the benefits of improved information over time. This may suggest an approach where near-term emissions abatement

1792-409: A no/low climate change scenario, with other options being suited for scenarios with severe climate changes. Investment and financial flow (I&FF) studies typically consider how much it might cost to increase the resilience of future investments or financial flows. They also investigate the potential sources of investment funds and the types of financing entities or actors. Aggregated studies assess

1904-459: A range of criteria or viewpoints, and is not restricted to the results of particular type of analysis, e.g., monetized CBA. Another approach is that of uncertainty analysis , where analysts attempt to estimate the probability of future changes in emission levels. In a cost–benefit analysis, an acceptable risk means that the benefits of a climate policy outweigh the costs of the policy. The standard rule used by public and private decision makers

2016-463: A rate of decline of 4.7% per decade. It has declined over 50% since the first satellite records. Ice-free summers are expected to be rare at 1.5 °C (2.7 °F) degrees of warming. They are set to occur at least once every decade with a warming level of 2 °C (3.6 °F). The Arctic will likely become ice-free at the end of some summers before 2050. Sea ice extent in Antarctica varies

2128-557: A series of tests to illuminate the basic structure and behavior of each model. Results are then compared, and the strengths and weaknesses of each model are documented in a report, which, as of 1982 is freely available. Reports for most completed projects are available on the EMF website. However, reports since 2006 occasionally been published exclusively in special editions of paywalled academic journals instead. Economic analysis of climate change An economic analysis of climate change uses economic tools and models to calculate

2240-467: A value to, e.g., ecosystems and human health. For (2), the standard criterion is the Kaldor–Hicks compensation principle . According to the compensation principle, so long as those benefiting from a particular project compensate the losers, and there is still something left over, then the result is an unambiguous gain in welfare. If there are no mechanisms allowing compensation to be paid, then it

2352-451: Is a particular long term concern as a result. The effects of ocean warming also include marine heatwaves , ocean stratification , deoxygenation , and changes to ocean currents .  The ocean is also acidifying as it absorbs carbon dioxide from the atmosphere. The ecosystems most immediately threatened by climate change are in the mountains , coral reefs , and the Arctic . Excess heat

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2464-409: Is a self-reinforcing feedback of climate change. Large-scale measurements of sea ice have only been possible since satellites came into use. Sea ice in the Arctic has declined in recent decades in area and volume due to climate change. It has been melting more in summer than it refreezes in winter. The decline of sea ice in the Arctic has been accelerating during the early twenty-first century. It has

2576-600: Is achieved. On the other hand, climate change adaptation acts as insurance against the chance that unfavourable impacts occur. The performance of adaptation options could either be defined in economic terms, e.g. revenue, or as physical metrics, e.g. the quantity of water conserved. It is important to compare alternative portfolios of options across different future climate change scenarios in order to take into account uncertainty in climate impacts, GHG emission trends etc. The options should ideally be diversified to be effective in different scenarios: i.e. some options suited for

2688-602: Is an indigenous practice in the US and Australia. It can reduce wildfire burning. The carbon released from wildfires adds to carbon dioxide in Earth's atmosphere and therefore contributes to the greenhouse effect . Climate models do not yet fully reflect this climate change feedback . There are many effects of climate change on oceans . One of the most important is an increase in ocean temperatures . More frequent marine heatwaves are linked to this. The rising temperature contributes to

2800-483: Is approximately 1600 gigatons. This is twice the atmospheric pool. Recent warming has had a big effect on natural biological systems. Species worldwide are moving poleward to colder areas. On land, species may move to higher elevations. Marine species find colder water at greater depths. Climate change had the third biggest impact on nature out of various factors in the five decades up to 2020. Only change in land use and sea use and direct exploitation of organisms had

2912-776: Is because species from one location do not leave the warming habitat at the same rate. The result is rapid changes in the way the ecosystem functions. Impacts include changes in regional rainfall patterns. Another is earlier leafing of trees and plants over many regions. Movements of species to higher latitudes and altitudes, changes in bird migrations, and shifting of the oceans' plankton and fish from cold- to warm-adapted communities are other impacts. These changes of land and ocean ecosystems have direct effects on human well-being. For instance, ocean ecosystems help with coastal protection and provide food. Freshwater and land ecosystems can provide water for human consumption. Furthermore, these ecosystems can store carbon. This helps to stabilize

3024-765: Is causing environmental changes in those locations that exceed the ability of animals to adapt. Species are escaping heat by migrating towards the poles and to higher ground when they can. Sea level rise threatens coastal wetlands with flooding . Decreases in soil moisture in certain locations can cause desertification and damage ecosystems like the Amazon Rainforest . At 2 °C (3.6 °F) of warming, around 10% of species on land would become critically endangered. Humans are vulnerable to climate change in many ways. Sources of food and fresh water can be threatened by environmental changes. Human health can be impacted by weather extremes or by ripple effects like

3136-413: Is expected in the future. Permafrost thaw makes the ground weaker and unstable. The thaw can seriously damage human infrastructure in permafrost areas such as railways, settlements and pipelines. Thawing soil can also release methane and CO 2 from decomposing microbes. This can generate a strong feedback loop to global warming . Some scientists believe that carbon storage in permafrost globally

3248-497: Is expected to become rarer. This depends on several factors. These include changes in rain and snowmelt, but also soil moisture . Climate change leaves soils drier in some areas, so they may absorb rainfall more quickly. This leads to less flooding. Dry soils can also become harder. In this case heavy rainfall runs off into rivers and lakes. This increases risks of flooding. Climate change affects many factors associated with droughts . These include how much rain falls and how fast

3360-460: Is limited evidence for its importance. A partial collapse of the ice sheet would lead to rapid sea level rise and a local decrease in ocean salinity. It would be irreversible for decades and possibly even millennia. The complete loss of the West Antarctic ice sheet would cause over 5 metres (16 ft) of sea level rise. In contrast to the West Antarctic ice sheet, melt of the Greenland ice sheet

3472-495: Is limited to 1.5 °C compared to 3.66 °C, a warming level chosen to represent no mitigation. In an Oxford Economics study high emission scenario, a temperature rise of 2 degrees by the year 2050 would reduce global GDP by 2.5–7.5%. By the year 2100 in this case, the temperature would rise by 4 degrees, which could reduce the global GDP by 30% in the worst case. One 2018 study found that potential global economic gains if countries implement mitigation strategies to comply with

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3584-481: Is linked to reduced incomes in Africa. Other econometric studies show that there are negative impacts of hotter temperatures on agricultural output, and on labour productivity in factories, call centres and in outdoor industries such as mining and forestry. The analyses are used to estimate the costs of climate change in the future. Standard cost–benefit analysis (CBA) has been applied to the problem of climate change. In

3696-406: Is more modest. Another way of viewing the problem is to look at the potential irreversibility of future climate change impacts (e.g., damages to biomes and ecosystems ) against the irreversibility of making investments in efforts to reduce emissions. An example of a framework that is based on risk management is portfolio analysis. This approach is based on portfolio theory , originally applied in

3808-735: Is necessary to assign weights to particular individuals. One of the mechanisms for compensation is impossible for this problem: mitigation might benefit future generations at the expense of current generations, but there is no way that future generations can compensate current generations for the costs of mitigation. On the other hand, should future generations bear most of the costs of climate change, compensation to them would not be possible. CBA has several strengths: it offers an internally consistent and global comprehensive analysis of impacts. Furthermore, sensitivity analysis allows critical assumptions in CBA analysis to be changed. This can identify areas where

3920-458: Is projected to take place more gradually over millennia. Sustained warming between 1 °C (1.8 °F) (low confidence) and 4 °C (7.2 °F) (medium confidence) would lead to a complete loss of the ice sheet. This would contribute 7 m (23 ft) to sea levels globally. The ice loss could become irreversible due to a further self-enhancing feedback. This is called the elevation-surface mass balance feedback. When ice melts on top of

4032-467: Is related to temperature. It also increases if humidity is higher. The wet-bulb temperature measures both temperature and humidity. Humans cannot adapt to a wet-bulb temperature above 35 °C (95 °F). This heat stress can kill people. If global warming is kept below 1.5 or 2 °C (2.7 or 3.6 °F), it will probably be possible to avoid this deadly heat and humidity in most of the tropics. But there may still be negative health impacts. There

4144-478: Is some evidence climate change is leading to a weakening of the polar vortex . This would make the jet stream more wavy. This would lead to outbursts of very cold winter weather across parts of Eurasia and North America and incursions of very warm air into the Arctic. Warming increases global average precipitation . Precipitation is when water vapour condenses out of clouds, such as rain and snow. Higher temperatures increase evaporation and surface drying. As

4256-602: Is sometimes a focus on "best estimate" or "likely" values of climate sensitivity . However, from a risk management perspective, values outside of "likely" ranges are relevant, because, though these values are less probable, they could be associated with more severe climate impacts (the statistical definition of risk = probability of an impact × magnitude of the impact). Analysts have also looked at how uncertainty over climate sensitivity affects economic estimates of climate change impacts. Policy guidance from cost-benefit analysis (CBA) can be extremely divergent depending on

4368-452: Is that a risk will be acceptable if the expected net present value is positive. The expected value is the mean of the distribution of expected outcomes. In other words, it is the average expected outcome for a particular decision. This criterion has been justified on the basis that: On the second point, it has been suggested that insurance could be bought against climate change risks. Policymakers and investors are beginning to recognize

4480-554: Is the most important driver of losses. However, part of these are also due to human-induced climate change. Extreme Event Attribution quantifies how climate change is altering the probability and magnitude of extreme events. On a case-by-case basis, it is feasible to estimate how the magnitude and/or probability of the extreme event has shifted due to climate change. These attributable changes have been identified for many individual extreme heat events and rainfall events. Using all available data on attributable changes, one study estimated

4592-786: The 1929 Great Depression permanently. The appropriate social cost of carbon is 1065 dollars per tonne of CO2. Global estimates are often based on an aggregation of independent sector and/or regional studies and results, with complex interactions modelled. For example, there is uncertainty in how physical and natural systems may respond to climate change. Potential socioeconomic changes, including how human societies might mitigate and adapt to climate change also need consideration. The uncertainty and complexities associated with climate change and have led analysts to develop " scenarios " with which they can explore different possibilities. Global economic losses due to extreme weather, climate and water events are increasing. Costs have increased sevenfold from

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4704-451: The Amazon rainforest is recycled when it evaporates back into the atmosphere instead of running off away from the rainforest. This water is essential for sustaining the rainforest. Due to deforestation the rainforest is losing this ability. This effect is even worse because climate change brings more frequent droughts to the area. The higher frequency of droughts in the first two decades of

4816-575: The Arctic has warmed faster than most other regions due to climate change feedbacks . Surface air temperatures over land have also increased at about twice the rate they do over the ocean, causing intense heat waves . These temperatures would stabilize if greenhouse gas emissions were brought under control . Ice sheets and oceans absorb the vast majority of excess heat in the atmosphere, delaying effects there but causing them to accelerate and then continue after surface temperatures stabilize. Sea level rise

4928-667: The Shared socioeconomic pathways . Notable modelling frameworks include IMAGE, MESSAGEix, AIM/GCE, GCAM, REMIND- MAgPIE , and WITCH-GLOBIOM. While these scenarios are highly policy-relevant, interpretation of the scenarios should be done with care. Computable general equilibrium (CGE) models are a class of economic models that use actual economic data to estimate how an economy might react to changes in policy , technology or other external factors. CGE models are also referred to as AGE ( applied general equilibrium ) models. A CGE model consists of equations describing model variables and

5040-417: The economics of climate change mitigation and the cost of climate adaptation . Mitigation costs will vary according to how and when emissions are cut. Early, well-planned action will minimize the costs. Globally, the benefits of keeping warming under 2 °C exceed the costs. Cost estimates for mitigation for specific regions depend on the quantity of emissions allowed for that region in future, as well as

5152-415: The emissions of greenhouse gases from human activities, mainly burning of fossil fuels and deforestation . Carbon dioxide and methane are examples of greenhouse gases. The additional greenhouse effect leads to ocean warming because the ocean takes up most of the additional heat in the climate system . The ocean also absorbs some of the extra carbon dioxide that is in the atmosphere . This causes

5264-425: The impacts of climate change on human health , biomes and ecosystem services . Economic analysis of climate change is challenging as climate change is a long-term problem. Furthermore, there is still a lot of uncertainty about the exact impacts of climate change and the associated damages to be expected. Future policy responses and socioeconomic development are also uncertain. Economic analysis also looks at

5376-415: The outlet glaciers . Future melt of the West Antarctic ice sheet is potentially abrupt under a high emission scenario, as a consequence of a partial collapse. Part of the ice sheet is grounded on bedrock below sea level. This makes it possibly vulnerable to the self-enhancing process of marine ice sheet instability . Marine ice cliff instability could also contribute to a partial collapse. But there

5488-415: The pH value of the seawater to drop . Scientists estimate that the ocean absorbs about 25% of all human-caused CO 2 emissions. The various layers of the oceans have different temperatures. For example, the water is colder towards the bottom of the ocean. This temperature stratification will increase as the ocean surface warms due to rising air temperatures. Connected to this is a decline in mixing of

5600-447: The shared socioeconomic pathways produced by the Intergovernmental Panel on Climate Change (IPCC). These project a wide range of possible future emissions levels. Scenarios often support sector-specific analysis of the physical effects and economic costs of climate change. Scenarios are used with cost–benefit analysis or cost-effectiveness analysis of climate policies. Risk management can be used to evaluate policy decisions based

5712-475: The spread of infectious diseases . Economic impacts include changes to agriculture , fisheries , and forestry . Higher temperatures will increasingly prevent outdoor labor in tropical latitudes due to heat stress . Island nations and coastal cities may be inundated by rising sea levels. Some groups of people may be particularly at risk from climate change, such as the poor , children , and indigenous peoples . Industrialised countries , which have emitted

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5824-510: The "plethora of detailed quantitative results" being disseminated and discussed. As a result, the EMF sought to bring energy modelers together to provide a proper context for their work. Indeed, the EMF was "formed to foster better communication between the builders and users of energy models in energy planning and policy analysis". The EMF periodically establishes ad hoc working groups to conduct studies on selected energy topics. A working group then identifies relevant existing models and sets

5936-489: The 1970s to the 2010s. Direct losses from disasters have averaged above US$ 330 billion annually between 2015 and 2021. Climate change has contributed to the increased probability and magnitude of extreme events. When a vulnerable community is exposed to extreme climate or weather events, disasters can occur. Socio-economic factors have contributed to the observed trend of global disaster losses, such as population growth and increased wealth. This shows that increased exposure

6048-510: The 2 °C target set at the Paris Agreement are in the vicinity of US$ 17 trillion per year up to 2100, compared to a very high emission scenario. Effects of climate change Effects of climate change are well documented and growing for Earth's natural environment and human societies. Changes to the climate system include an overall warming trend , changes to precipitation patterns , and more extreme weather . As

6160-410: The 21st century and other data signal that a tipping point from rainforest to savanna might be close. A 2019 study concluded that this ecosystem could begin a 50-year-long collapse to a savanna around 2021. After that it would become increasingly and disproportionally more difficult to prevent or reverse this shift. Marine heatwaves are happening more often. They have widespread impacts on life in

6272-635: The Earth. In particular, most land areas have warmed faster than most ocean areas. The Arctic is warming faster than most other regions. Night-time temperatures have increased faster than daytime temperatures. The impact on nature and people depends on how much more the Earth warms. Scientists use several methods to predict the effects of human-caused climate change. One is to investigate past natural changes in climate. To assess changes in Earth's past climate scientists have studied tree rings , ice cores , corals , and ocean and lake sediments . These show that recent temperatures have surpassed anything in

6384-579: The Himalayas in Asia, the retreat of glaciers could impact water supply. The melting of those glaciers could also cause landslides or glacial lake outburst floods . The melting of the Greenland and West Antarctic ice sheets will continue to contribute to sea level rise over long time-scales. The Greenland ice sheet loss is mainly driven by melt from the top. Antarctic ice loss is driven by warm ocean water melting

6496-716: The actions that governments have taken around the world. The lower and middle atmosphere, where nearly all weather occurs, are heating due to the greenhouse effect . Evaporation and atmospheric moisture content increase as temperatures rise. Water vapour is a greenhouse gas, so this process is a self-reinforcing feedback . The excess water vapour also gets caught up in storms. This makes them more intense, larger, and potentially longer-lasting. This in turn causes rain and snow events to become stronger and leads to increased risk of flooding. Extra drying worsens natural dry spells and droughts. This increases risk of heat waves and wildfires. Scientists have identified human activities as

6608-451: The air warms it can hold more water. For every degree Celsius it can hold 7% more water vapour . Scientists have observed changes in the amount, intensity, frequency, and type of precipitation. Overall, climate change is causing longer hot dry spells, broken by more intense rainfall. Climate change has increased contrasts in rainfall amounts between wet and dry seasons. Wet seasons are getting wetter and dry seasons are getting drier. In

6720-426: The amount of GHG emissions reduction in the analysis of mitigation measures. For adaptation measures, there is no single common goal or metric for the economic benefits. Adaptation involves responding to different types of risks in different sectors and local contexts. For example, the goal might be the reduction of land area in hectares at risk to sea level rise. CEA involves the costing of each option, and providing

6832-424: The areas of finance and investment. It has also been applied to the analysis of climate change. The idea is that a reasonable response to uncertainty is to invest in a wide portfolio of options. More specifically, the aim is to minimise the variance and co-variance of the performance of investments in the portfolio. In the case of climate change mitigation , performance is measured by how much GHG emissions reduction

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6944-472: The assumptions employed. Hassler et al use integrated assessment modeling to examine a range of estimates and what happens at extremes. Two related ways of thinking about the problem of climate change decision-making in the presence of uncertainty are iterative risk management and sequential decision making . Considerations in a risk-based approach might include, for example, the potential for low-probability, worst-case climate change impacts. One of

7056-490: The biosphere and atmosphere into one modelling framework. The total economic impacts from climate change are difficult to estimate. In general, they increase the more the global surface temperature increases (see climate change scenarios ). Many effects of climate change are linked to market transactions and therefore directly affect metrics like GDP or inflation . However, there are also non-market impacts which are harder to translate into economic costs. These include

7168-407: The broad impacts of climate change with other economic drivers, to quantify the economic costs and assess the value of climate-related policies, often for a specific sector or region. Structural economic models look at market and non-market impacts affecting the whole economy through its inputs and outputs. Process models simulate physical, chemical and biological processes under climate change, and

7280-456: The cause of recent climate trends. They are now able to estimate the impact of climate change on extreme weather events using a process called extreme event attribution . For instance such research can look at historical data for a region and conclude that a specific heat wave was more intense due to climate change. In addition , the time shifts of the season onsets, changes in the length of the season durations have been reported in many regions of

7392-480: The choice to assess impacts in a variety of indicators or units, e.g., changes in agricultural yields and loss of biodiversity. By contrast, monetized CBA converts all impacts into a common unit (money), which is used to assess changes in social welfare . The long time scales and uncertainty associated with global warming have led analysts to develop " scenarios " of future environmental , social and economic changes. These scenarios can help governments understand

7504-477: The climate changes it impacts the natural environment with effects such as more intense forest fires , thawing permafrost , and desertification . These changes impact ecosystems and societies, and can become irreversible once tipping points are crossed. Climate activists are engaged in a range of activities around the world that seek to ameliorate these issues or prevent them from happening. The effects of climate change vary in timing and location. Up until now

7616-601: The climate system. Climate change is a major driver of biodiversity loss in different land types. These include cool conifer forests, savannas , mediterranean-climate systems, tropical forests , and the Arctic tundra . In other ecosystems, land-use change may be a stronger driver of biodiversity loss, at least in the near term. Beyond 2050, climate change may be the major cause of biodiversity loss globally. Climate change interacts with other pressures. These include habitat modification, pollution and invasive species . Through this interaction, climate change increases

7728-400: The climate. Computable General Equilibrium (CGE) structural models investigate effects of policies (including climate policies) on economic growth, trade, employment, and public revenues. However, most CBA analyses are produced using aggregate integrated assessment models . These aggregate-type IAMs are particularly designed for doing CBA of climate change. The CBA framework requires (1)

7840-444: The cost of climate change mitigation may divert resources away from other socially and environmentally beneficial investments (the opportunity costs of climate change policy). Various economic tools are employed to understand the economic aspects around impacts of climate change, climate change mitigation and adaptation . Several sets of tools or approaches exist. Econometric models (statistical models) are used to integrate

7952-440: The economic aspects of climate change is producing scenarios of future economic development . Future economic developments can, for example, affect how vulnerable society is to future climate change, what the future impacts of climate change might be, as well as the level of future GHG emissions. Scenarios are neither "predictions" nor "forecasts" but are stories of possible futures that provide alternate outcomes relevant to

8064-508: The economic benefits of proactive climate mitigation. Another study, which checked the data from the last 120 years, found that climate change has already reduced welfare by 29% and further temperature rise will bring this number to 47%. The temperature rise during the years 1960-2019 alone has already cut current GDP per capita by 18%. A rise by 1 degree in global temperature reduces global GDP by 12%. An increase of 3 degrees by 2100, will reduce capital by 50%. The effects are like experiencing

8176-485: The economic effects. Intergovernmental Panel on Climate Change (IPCC) has relied on process-based integrated assessment models to quantify mitigation scenarios. They have been used to explore different pathways for staying within climate policy targets such as the 1.5 °C target agreed upon in the Paris Agreement. Moreover, these models have underpinned research including energy policy assessment and simulate

8288-432: The economic implications of mitigation and climate damages to identify the pathway of emissions reductions that will maximize total economic welfare. In other words, the trade-offs between climate change impacts, adaptation, and mitigation are made explicit. The costs of each policy and the outcomes modelled are converted into monetary estimates. The models incorporate aspects of the natural, social, and economic sciences in

8400-415: The extinction of species would be an irreversible impact. In social systems, unique cultures may be lost. Climate change could make it more likely that endangered languages disappear. Humans have a climate niche. This is a certain range of temperatures in which they flourish. Outside that niche, conditions are less favourable. This leads to negative effects on health, food security and more. This niche

8512-555: The far western Sahel. Storms become wetter under climate change. These include tropical cyclones and extratropical cyclones . Both the maximum and mean rainfall rates increase. This more extreme rainfall is also true for thunderstorms in some regions. Furthermore, tropical cyclones and storm tracks are moving towards the poles. This means some regions will see large changes in maximum wind speeds. Scientists expect there will be fewer tropical cyclones. But they expect their strength to increase. There has probably been an increase in

8624-1242: The following years. Economic analysis of climate change is an umbrella term for a range of investigations into the economic costs around the effects of climate change , and for preventing or softening those effects. These investigations can serve any of the following purposes: The economic impacts of climate change also include any mitigation (for example, limiting the global average temperature below 2 °C) or adaption (for example, building flood defences) employed by nations or groups of nations, which might infer economic consequences. They also take into account that some regions or sectors benefit from low levels of warming, for example through lower energy demand or agricultural advantages in some markets. There are wider policy (and policy coherence) considerations of interest. For example, in some areas, policies designed to mitigate climate change may contribute positively towards other sustainable development objectives, such as abolishing fossil fuel subsidies which would reduce air pollution and thus save lives. Direct global fossil fuel subsidies reached $ 319 billion in 2017, and $ 5.2 trillion when indirect costs such as air pollution are priced in. In other areas,

8736-486: The global losses to average US$ 143 billion per year between 2000 and 2019. This includes a statistical loss of life value of 90 billion and economic damages of 53 billion per year. Estimates of the economic impacts from climate change in future years are most often measured as percent global GDP change, relative to GDP without additional climate change. The 2022 IPCC report compared the latest estimates of many modelling and meta-analysis studies. It found wide variety in

8848-429: The ice sheet, the elevation drops. Air temperature is higher at lower altitudes, so this promotes further melting. Sea ice reflects 50% to 70% of the incoming solar radiation back into space. Only 6% of incoming solar energy is reflected by the ocean. As the climate warms, the area covered by snow or sea ice decreases. After sea ice melts, more energy is absorbed by the ocean, so it warms up. This ice-albedo feedback

8960-731: The impact of acidification. Warm-water coral reefs are very sensitive to global warming and ocean acidification. Coral reefs provide a habitat for thousands of species. They provide ecosystem services such as coastal protection and food. But 70–90% of today's warm-water coral reefs will disappear even if warming is kept to 1.5 °C (2.7 °F). Coral reefs are framework organisms. They build physical structures that form habitats for other sea creatures. Other framework organisms are also at risk from climate change. Mangroves and seagrass are considered to be at moderate risk from lower levels of global warming. The climate system exhibits "threshold behavior" or tipping points when parts of

9072-405: The implications of climate change for the financial sector, from both physical risks (damage to property, infrastructure, and land) and transition risk due to changes in policy, technology, and consumer and market behavior. Financial institutions are becoming increasingly aware of the need to incorporate the economics of low carbon emissions into business models. In the scientific literature, there

9184-472: The intensity of individual heat waves to global warming. Some extreme events would have been nearly impossible without human influence on the climate system. A heatwave that would occur once every ten years before global warming started now occurs 2.8 times as often. Under further warming, heatwaves are set to become more frequent. An event that would occur every ten years would occur every other year if global warming reaches 2 °C (3.6 °F). Heat stress

9296-410: The intensity of the hazard, other factors such as the vulnerability of the system, and the resulting damages. For example, damage functions have been developed for sea level rise, agricultural productivity, or heat effects on labour productivity. In a CBA framework, damages are monetized to facilitate comparison with the benefits of proposed actions or policies. Sensitivity analysis is conducted to assess

9408-519: The largest declines have been observed in the spring. During the 21st century, snow cover is projected to continue its retreat in almost all regions. Since the beginning of the twentieth century, there has been a widespread retreat of glaciers . Those glaciers that are not associated with the polar ice sheets lost around 8% of their mass between 1971 and 2019. In the Andes in South America and in

9520-547: The last 2,000 years. By the end of the 21st century, temperatures may increase to a level last seen in the mid-Pliocene . This was around 3 million years ago. At that time, mean global temperatures were about 2–4 °C (3.6–7.2 °F) warmer than pre-industrial temperatures. The global mean sea level was up to 25 metres (82 ft) higher than it is today. The modern observed rise in temperature and CO 2 concentrations has been rapid. Even abrupt geophysical events in Earth's history do not approach current rates. How much

9632-568: The light of improved information . This is particularly important with respect to climate change, due to the long-term nature of the problem. A near-term hedging strategy concerned with reducing future climate impacts might favor stringent, near-term emissions reductions. As stated earlier, carbon dioxide accumulates in the atmosphere, and to stabilize the atmospheric concentration of CO 2 , emissions would need to be drastically reduced from their present level. Stringent near-term emissions reductions allow for greater future flexibility with regard to

9744-519: The magnitude and distribution of damages caused by climate change . It can also give guidance for the best policies for mitigation and adaptation to climate change from an economic perspective. There are many economic models and frameworks. For example, in a cost–benefit analysis , the trade offs between climate change impacts, adaptation, and mitigation are made explicit. For this kind of analysis, integrated assessment models (IAMs) are useful. Those models link main features of society and economy with

9856-494: The natural environment enter into a new state. Examples are the runaway loss of ice sheets or the dieback of forests. Tipping behavior is found in all parts of the climate system. These include ecosystems, ice sheets, and the circulation of the ocean and atmosphere. Tipping points are studied using data from Earth's distant past and by physical modeling. There is already moderate risk of global tipping points at 1 °C (1.8 °F) above pre-industrial temperatures. That becomes

9968-468: The northern high latitudes , warming has also caused an increase in the amount of snow and rain. In the Southern Hemisphere, the rain associated with the storm tracks has shifted south. Changes in monsoons vary a lot. More monsoon systems are becoming wetter than drier. In Asia summer monsoons are getting wetter. The West African monsoon is getting wetter over the central Sahel , and drier in

10080-649: The number of tropical cyclones that intensify rapidly. Meteorological and seismological data indicate a widespread increase in wind-driven global ocean wave energy in recent decades that has been attributed to an increase in storm intensity over the oceans due to climate change. Atmospheric turbulence dangerous for aviation (hard to predict or that cannot be avoided by flying higher) probably increases due to climate change. Due to an increase in heavy rainfall events, floods are likely to become more severe when they do occur. The interactions between rainfall and flooding are complex. There are some regions in which flooding

10192-423: The ocean layers, so that warm water stabilises near the surface. A reduction of cold, deep water circulation follows. The reduced vertical mixing makes it harder for the ocean to absorb heat. So a larger share of future warming goes into the atmosphere and land. One result is an increase in the amount of energy available for tropical cyclones and other storms. Another result is a decrease in nutrients for fish in

10304-615: The oceans. These include mass dying events and coral bleaching . Harmful algae blooms have increased. This is in response to warming waters, loss of oxygen and eutrophication . Melting sea ice destroys habitat, including for algae that grows on its underside. Ocean acidification can harm marine organisms in various ways. Shell-forming organisms like oysters are particularly vulnerable. Some phytoplankton and seagrass species may benefit. However, some of these are toxic to fish phytoplankton species. Their spread poses risks to fisheries and aquaculture . Fighting pollution can reduce

10416-521: The past 3,000 years. The rate accelerated to 4.62 mm (0.182 in)/yr for the decade 2013–2022. Climate change due to human activities is the main cause. Between 1993 and 2018, melting ice sheets and glaciers accounted for 44% of sea level rise , with another 42% resulting from thermal expansion of water . The cryosphere , the area of the Earth covered by snow or ice, is extremely sensitive to changes in global climate. There has been an extensive loss of snow on land since 1981. Some of

10528-580: The past. Several impacts make their impacts worse. These are increased water demand, population growth and urban expansion in many areas. Land restoration can help reduce the impact of droughts. One example of this is agroforestry . Climate change promotes the type of weather that makes wildfires more likely. In some areas, an increase of wildfires has been attributed directly to climate change. Evidence from Earth's past also shows more fire in warmer periods. Climate change increases evapotranspiration . This can cause vegetation and soils to dry out. When

10640-488: The potential consequences of their decisions. The projected temperature in climate change scenarios is subject to scientific uncertainty (e.g., the relationship between concentrations of GHGs and global mean temperature, which is called the climate sensitivity ). Projections of future atmospheric concentrations based on emission pathways are also affected by scientific uncertainties, e.g., over how carbon sinks, such as forests, will be affected by future climate change. One of

10752-412: The predicted impacts of climate change across all market sectors (e.g. including costs to agriculture, energy services and tourism) and can also include non-market impacts (e.g. on ecosystems and human health) for which it is possible to assign monetary values. A study in 2024 projected that by 2050, climate change will reduce average global incomes by likely 19% ( confidence interval 11-29%), relative to

10864-589: The rain evaporates again. Warming over land increases the severity and frequency of droughts around much of the world. In some tropical and subtropical regions of the world, there will probably be less rain due to global warming. This will make them more prone to drought. Droughts are set to worsen in many regions of the world. These include Central America, the Amazon and south-western South America. They also include West and Southern Africa. The Mediterranean and south-western Australia are also some of these regions. Higher temperatures increase evaporation. This dries

10976-670: The responses to the uncertainties of global warming is to adopt a strategy of sequential decision making. Sequential decision making refers to the process in which the decision maker makes consecutive observations of the process before making a final decision. This strategy recognizes that decisions on global warming need to be made with incomplete information , and that decisions in the near term will have potentially long-term impacts. Governments may use risk management as part of their policy response to global warming. An approach based on sequential decision making recognizes that, over time, decisions related to climate change can be revised in

11088-1558: The results. These vary depending on the assumptions used in the IPCC socioeconomic scenarios . The same set of scenarios are used in all of the climate models. Estimates are found to increase non-linearly with global average temperature change. Global temperature change projection ranges (corresponding to each cost estimate) are based on IPCC assessment on the physical science in the same report. It finds that with high warming (~4 °C) and low adaptation, annual global GDP might be reduced by 10–23% by 2100 because of climate change. The same assessment finds smaller GDP changes with reductions of 1–8%, assuming assuming low warming, more adaptation, and using different models. These global economic cost estimates do not take into account impacts on social well-being or welfare or distributional effects. Nor do they fully consider climate change adaptation responses. One 2020 study estimated economic losses due to climate change could be between 127 and 616 trillion dollars extra until 2100 with current commitments, compared to 1.5 °C or well below 2 °C compatible action. Failure to implement current commitments raises economic losses to 150–792 trillion dollars until 2100. Economic impacts also include inflation from rising insurance premiums , energy costs and food prices . The total economic impacts from climate change increase for higher temperature changes. For instance, total damages are estimated to be 90% less if global warming

11200-406: The risk of extinction for many terrestrial and freshwater species. At 1.2 °C (2.2 °F) of warming (around 2023 ) some ecosystems are threatened by mass die-offs of trees and from heatwaves. At 2 °C (3.6 °F) of warming, around 10% of species on land would become critically endangered. This differs by group. For instance insects and salamanders are more vulnerable. Rainfall on

11312-415: The robustness of the results to changes in assumptions and parameters, including those of the damage function. Cost-Effectiveness Analysis (CEA) is preferable to CBA when the benefits of impacts, adaptation and mitigation are difficult to estimate in monetary terms. A CEA can be used to compare different policy options for achieving a well-defined goal. This goal (i.e. the benefit) is usually expressed as

11424-408: The sensitivity of future investments, estimating the risk from climate change and estimating the additional investment needed to increase resilience. More detailed studies undertake investment and financial flow analysis at a sectoral level to provide detailed costing of the additional marginal costs needed for building resilience. Global aggregate costs (also known as global damages or losses) sum up

11536-445: The soil and increases plant stress . Agriculture suffers as a result. This means even regions where overall rainfall is expected to remain relatively stable will experience these impacts. These regions include central and northern Europe. Without climate change mitigation, around one third of land areas are likely to experience moderate or more severe drought by 2100. Due to global warming droughts are more frequent and intense than in

11648-418: The temperature will be about 2.7 °C (2.0–3.6 °C) above pre-industrial levels by 2100. It would rise by 2.4 °C (4.3 °F) if governments achieved all their unconditional pledges and targets. If all the countries that have set or are considering net-zero targets achieve them, the temperature will rise by around 1.8 °C (3.2 °F). There is a big gap between national plans and commitments and

11760-405: The timing of interventions. Economists estimate the cost of climate change mitigation at between 1% and 2% of GDP . The costs of planning, preparing for, facilitating and implementing adaptation are also difficult to estimate, depending on different factors. Across all developing countries, they have been estimated to be about USD 215 billion per year up to 2030, and are expected to be higher in

11872-440: The upper ocean layers. These changes also reduce the ocean's capacity to store carbon . At the same time, contrasts in salinity are increasing. Salty areas are becoming saltier and fresher areas less salty. Between 1901 and 2018, the average sea level rose by 15–25 cm (6–10 in), with an increase of 2.3 mm (0.091 in) per year since the 1970s. This was faster than the sea level had ever risen over at least

11984-649: The valuation of costs and benefits using willingness to pay (WTP) or willingness to accept (WTA) compensation as a measure of value, and (2) a criterion for accepting or rejecting proposals: For (1), in CBA where WTP/WTA is used, climate change impacts are aggregated into a monetary value, with environmental impacts converted into consumption equivalents, and risk accounted for using certainty equivalents . Values over time are then discounted to produce their equivalent present values . The valuation of costs and benefits of climate change can be controversial because some climate change impacts are difficult to assign

12096-408: The value of information is highest and where additional research might have the highest payoffs. However, there are many uncertainties that affect cost–benefit analysis, for example, sector- and country-specific damage functions. Damage functions play an important role in estimating the costs associated with potential damages caused by climate-related hazards. They quantify the relationship between

12208-431: The vast majority of CO 2 , have more resources to adapt to global warming than developing nations do. Cumulative effects and extreme weather events can lead to displacement and migration . Global warming affects all parts of Earth's climate system . Global surface temperatures have risen by 1.1 °C (2.0 °F). Scientists say they will rise further in the future. The changes in climate are not uniform across

12320-404: The world warms depends on human greenhouse gas emissions and on how sensitive the climate is to greenhouse gases . The more carbon dioxide (CO 2 ) is emitted in the 21st century the hotter the world will be by 2100. For a doubling of greenhouse gas concentrations, the global mean temperature would rise by about 2.5–4 °C (4.5–7.2 °F). If emissions of CO 2 stopped abruptly and there

12432-584: The world. As a result, the timing of extreme weather events, such as heavy precipitation and heat waves, is changing to coincide more closely with changes in seasonal patterns. Heatwaves over land have become more frequent and more intense in almost all world regions since the 1950s, due to climate change . Heat waves are more likely to occur simultaneously with droughts. Marine heatwaves are twice as likely as they were in 1980. Climate change will lead to more very hot days and fewer very cold days. There are fewer cold waves . Experts can often attribute

12544-459: Was no use of negative emission technologies , the Earth's climate would not start moving back to its pre-industrial state. Temperatures would stay at the same high level for several centuries. After about a thousand years, 20% to 30% of human-emitted CO 2 would remain in the atmosphere. The ocean and land would not have taken them. This would commit the climate to a warmer state long after emissions have stopped. With current mitigation policies

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