The Impacts of Climate Variability on Near-Term Policy Choices and the Value of Information

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

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Variability is one of the most salient features of the earth's climate, yet quantitative policy studies have generally ignored the impact of variability on society's best choice of climate-change policy. This omission is troubling because an adaptive emissions-reduction strategy that adjusts abatement rates over time based on observations of damages and abatement costs should perform much better than static, best-estimate policies. However, climate variability can strongly affect the success of such a strategy by masking adverse trends or fooling society into taking too strong an action. This study compares the performance of a wide variety of greenhouse-gas-abatement strategies against a broad range of plausible climate-change scenarios. The authors find that (1) adaptive strategies remain preferable to static, best-estimate policies, even with high levels of climate variability; (2) the most robust strategies adjust future emissions reduction rates on the basis of small changes in observed abatement costs but only for large changes in observed damages; and (3) information about the size of the variability is about a third to an eighth as valuable as information determining the value of the key parameters that represent the long-term, future climate-change state of the world.

Originally published in: Climatic Change, v. 45, no. 1, April 2000, pp. 129-161.

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