The Impacts and Costs of Climate Change

The Impacts and Costs of Climate Change
Adaptation costs
The study has briefly considered adaptation. There is an emerging view that planning for climate
change adaptation should begin as soon as possible because anticipatory and precautionary adaptation
is more effective and less costly than forced, last minute, emergency adaptation or retrofitting (EEA
2004). The ability of human systems to adapt to and cope with climate change depends on such
factors as wealth, technology, education, information, skills, infrastructure, access to resources and
management capabilities (TAR 2001). Developing countries have less of these attributes and as a
result have a lesser capacity to adapt and are more vulnerable to climate change impacts. Reviews of
climate change adaptation work12 have shown that climate change costing studies often pay little
attention to adaptation costs and further research would increase the reliability of adaptation cost
estimates.
Ancillary effects
There is growing recognition that mitigation policies or scenarios that are aimed at reducing
greenhouse gas emissions may have important ancillary benefits. These potentially include:
* Reductions in air pollution;
* Reductions in other environmental burdens;
* Increased security of energy supply (and/or energy diversity), including reduced oil imports;
* Improved competitiveness;
* Increased employment;
* Innovation.
Whilst the full benefit of greenhouse gas reductions resulting from further climate action may only be
experienced by future generations, the ancillary benefits of climate policy will accrue to the current
generation. However, there have also been concerns that policies may lead to potential dis-benefits,
with some literature referring to:
* Impacts on trade and competitiveness (note this is also mentioned as a potential benefit above);
* Decreases in employment (again, this is also mentioned as a potential benefits above);
* Lifestyle changes;
* Security and proliferation with specific technology options (nuclear).
The study has reviewed the available information on ancillary effects. From this, we conclude that the
air quality benefits of GHG mitigation are likely to amount to a substantial benefit. A recent study
(Defra, 2002) found 20 estimates of the monetary value of ancillary benefits in the literature. The
estimates range from 1 Euro to 130 Euro/tCO2 reduced, with an average from across the studies of 27
Euro/tCO2.
It is also likely that many low carbon technologies will have ancillary benefits from reducing
dependence on imports and increasing energy security. This is due to the likely increase in
renewables, nuclear generation, coal generation with sequestration, as well as improvements in energy
efficiency. The effects of policies on employment, trade and competitiveness remain the subject of
much debate. These issues will be examined later in the study through the use of the GEM-E3 model.
Ancillary effects are important, and should be factored into the analysis of future climate change
policies. However, to assess these impacts properly, the ancillary effects need to be assessed and

reported separately, as they will vary with the exact policies and measures implemented.
12 Climate Change Impacts and Adaptation: A Canadian Perspective, Natural Resources Canada 2004
http://adaptation.nrcan. gc.ca/perspective/profile e.asp

AEA Technology Environment, August 2005

Watkiss, Paul; Downing, Tom; Handley, Claire & Butterfield, Ruth. The Impacts and Costs of Climate Change. Oxford, England. UNT Digital Library. http://digital.library.unt.edu/ark:/67531/metadc29337/. Accessed April 19, 2014.