Climate change is damaging ecosystems throughout the world with serious implications for human well-being. Quantifying the benefits of reducing emissions requires understanding these costs but the unique and non-market nature of many goods provided by natural systems makes them difficult to value. Detailed representation of ecological damages in models used to calculate the costs of greenhouse gas emissions has been largely lacking. Here the authors include natural capital as a form of wealth in a cost-benefit integrated assessment model and show that accounting for the use and non-use value of nature has large implications for climate policy. In their model, optimal emissions reach zero at the year 2050, limiting warming to 1.5°C by the end of the century, substantially lower than the standard model, which approaches 3°C by 2100. The paper shows that the cost of climate change could be alleviated by investments in natural capital and that capturing the effect of climate change on natural systems and the welfare effects of these changes should be a high priority for future research.
Environmental, energy, and ecological problems have grown faster than their solutions. Economists have an important role to play to address these issues by using the latest science, rigorous methods and innovative policy solutions. The SWEEEP webinar series aims to convene the academic community to contribute to the scientific, economic, and policy discourses on important environmental and energy issues.
The seminar presentations are scheduled to last 60 minutes, with questions at the end.
The European Institute on Economics and the Environment is a partnership between Resources for the Future and Foundation CMCC. EIEE’s impartial economic and environmental research aims to facilitate the transition to a sustainable, inclusive society.
Contact: Professor Massimo Tavoni
The Energy Management research team at the Grenoble Ecole de Management (GEM) combines research on economics, strategic management, technology innovation and energy policy in order to create and share knowledge that will help society move towards a low-carbon future.
Contact: Professor Sébastien Houde
The ZEW – Leibniz Centre for European Economic Research is a leading German economic policy institute and a member of the Leibniz Association. ZEW's applied research aims to study and help design well-performing markets and institutions in Europe. In particular, it seeks to understand how to create a market framework that will enable the sustainable and efficient development of European economies.
Contact: Professor Sebastian Rausch
The Centre for Energy Policy and Economics (CEPE) was established in 1999 to complement the natural science and technical-oriented disciplines at ETH Zurich, by contributing to research and teaching in energy policy and economics. Through rigorous application of modern empirical methods, the goal of CEPE is to make critical contributions to the design and evaluation of energy and climate policy instruments.
Contact: Professor Massimo Filippini
To participate, use this zoom registration link.