The Impacts and Costs of Climate Change Page: 57
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The Impacts and Costs of Climate Change
Thirdly, to explore the main elements in the risk matrix (above) that are not well captured currently:
* To extend the analysis of bounded risks (e.g. in relation to floods, storm damage) and non-market
valuation (e.g. health and ecosystems).
* To undertake scoping studies to assess the potential magnitude of major events, e.g. Greenland ice
sheet, etc. Some preliminary work has been undertaken, but this is a major area for future studies
to focus, both for the timing of events (and relationship with different stabilisation levels) and the
impacts. These are likely to have a major impact on the values.
* Similarly, to progress the understanding of, and potential magnitude of socially contingent
impacts, particularly looking at specific hot-spots such as Africa, Bangladesh, low lying islands.
There are perhaps ten significant developments which are ongoing or contemplated in the integrated
assessment community. Reducing uncertainty in the geophysical drivers of climate change include (i)
improving the scale of assessment and understanding aggregation issues, (ii) linking damage functions
to probabilistic scenarios of climate change; (iii) understanding cross-sectoral and multi-stressor
effects and (iv) refining estimates of potentially catastrophic impacts. Reducing uncertainty in
economic valuation includes: (1) adding new sectors to the damage functions; (2) broadening the
range of economic techniques (such as the premium attached to risk aversion); (3) including additional
metrics that policy maker may wish to take into account; (4) bounding exercises to provide a first-
order estimate of the range of potential damages; (5) understanding the dynamic aspects of
vulnerability and adaptive capacity and their relationship to damages over time; and (6) exploring the
effects of alternative value systems, particularly in the loss of non-market resources and non-marginal,
socially contingent effects. Of course, these developments are contingent upon improvements in
climate and impacts science, which we note below. These developments can be charted in the risk
matrix. It is apparent that improving estimates related to the larger uncertainties-the lower and right-
hand cells-requires several improvements, and these may be the more difficult developments,
constrained by the lack of data, the choice of analytical tools and the framing of climate policy
Finally, a number of additional aspects:
* To further the analysis of adaptation costs. Both FUND and PAGE include adaptation, and it
would be useful to separate out adaptation and damage costs. It would also be useful to undertake
a wider review and analysis of the literature on adaptation costs.
* Finally, work to bring all the impact and valuation data together in a form useful for policy
analysis (i.e. a multi-analysis framework). We believe that future policy considerations will need
to balance impact analysis, monetary benefits, and work with significant uncertainty and
sensitivity analysis to allow informed decisions. There is a need to develop a framework to
maximise the usefulness of all the information for policy makers.
AEA Technology Environment, August 2005
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Watkiss, Paul; Downing, Tom; Handley, Claire & Butterfield, Ruth. The Impacts and Costs of Climate Change, text, September 2005; Oxford, England. (digital.library.unt.edu/ark:/67531/metadc29337/m1/68/: accessed January 22, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; .