When We Don't Know the Costs or the Benefits

Adaptive Strategies for Abating Climate Change

by Robert J. Lempert, Michael E. Schlesinger, Steven C. Bankes

Most quantitative studies of climate-change policy attempt to predict the greenhouse-gas reduction plan that will have the optimum balance of long-term costs and benefits. The authors find that the large uncertainties associated with the climate-change problem can make the policy prescriptions of this traditional approach unreliable. In this study, the authors construct a large uncertainty space that includes the possibility of large and/or abrupt climate changes and/or of technology breakthroughs that radically reduce projected abatement costs. Computational experiments on a linked system of climate and economic models are used to compare the performance of a simple adaptive strategy — one that can make midcourse corrections based on observations of the climate and economic systems — and two commonly advocated "best estimate" policies based on different expectations about the long-term consequences of climate change. The results show that the "Do-a-Little" and "Emissions-Stabilization" best-estimate policies perform well in the respective regions of the uncertainty space where their estimates are valid, but can fail severely in those regions where their estimates are wrong. In contrast, the adaptive strategy can make midcourse corrections and avoid significant errors. While its success is no surprise, the adaptive-strategy approach provides an analytic framework to examine important policy and research issues that will likely arise as society adapts to climate change, which cannot be easily addressed in studies using best-estimate approaches.

Originally published in: Climatic Change, no. 33, 1996, pp. 235-274.

This report is part of the RAND Corporation reprint series. The Reprint was a product of the RAND Corporation from 1992 to 2011 that represented previously published journal articles, book chapters, and reports with the permission of the publisher. RAND reprints were formally reviewed in accordance with the publisher's editorial policy and compliant with RAND's rigorous quality assurance standards for quality and objectivity. For select current RAND journal articles, see External Publications.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.