Long-term Greenhouse Gas Stabilization and the Risks of Dangerous Impacts

Long-term Greenhouse Gas Stabilization and the Risks of

Dangerous Impacts

M. Webster, C.E. Forest, H. Jacoby, S. Paltsev, J. Parsons, R. Prinn, J. Reilly, M. Sarofim, A. Schlosser, A. Sokolov, P. Stone, C. Wang

Engineering Systems DivisionMIT Joint Program on the Science and Policy of Global Change

Massachusetts Institute of Technology

Society for Risk AnalysisNew England Chapter

April 28, 2009

Calvin’s View on Risky Decisions

Outline

• Motivation

• MIT IGSM Model Framework • Parametric Uncertainty

• Resulting Uncertainty in Projections

• Exploring Risk-Risk Tradeoffs

Climate Change Policy: Choosing a Long-Term Target

• UN Framework Convention on Climate Change– “…stabilization of greenhouse gas

concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.”

• How do we choose this stabilization level?

CCSP Product 2.1a

• Study of GHG Stabilization Scenarios• Three Models:

– MERGE (EPRI/Stanford)– MiniCAM (PNNL/UMD)– IGSM (MIT)

Source: Clarke et al., 2007

Stabilization Scenarios(Source: U.S. CCSP Product 2.1a)

Year

2000 2020 2040 2060 2080 2100

Glo

bal C

O2 E

mis

sion

s (G

tC)

0

5

10

15

20

25

No PolicyCCSP 750 CCSP 650 CCSP 550 CCSP 450

Global Mean Temperature Change(Deterministic)

2020 2040 2060 2080

Glo

bal M

ean

Tem

pera

ture

Cha

nge

from

200

0

0

1

2

3

4

5

No PolicyStabilize CO2 at 750ppm

Stabilize CO2 at 650ppm



Question for this Study

• How can we use information about risks of exceeding thresholds to guide our choice among long-run stabilization targets?

• Use the uncertainty in the CCSP results from one model (MIT IGSM)?

• Objective: Frame the choice of long-term stabilization target as a risk management decision– Consider risks of both climate impacts and abatement

costs

MIT MIT Integrated Integrated

Global Global Systems Systems

ModelModel

Uncertainty in Economics

• 110 Uncertain Parameters, including:– Productivity growth rates (historical data)– Energy efficiency growth rate (historical data)– Ease of substituting inputs (historical data)– Costs of new technologies (expert judgment)

• Main Uncertain Outputs:– Emissions (GHGs, urban pollutants)– Costs (consumption loss, carbon prices)

GDP Growth UncertaintyUSA GDP per Capita Growth Rates

1960 1980 2000 2020 2040 2060 2080 2100

GD

P p

er C

apita

Gro

wth

Rat

e (a

nnua

l %)

-1

0

1

2

3

4

5

6

Historical 5th Percentile50th Percentile95th Percentile

Methodology

• Latin Hypercube Monte Carlo– 400 random samples of all parameters– Impose correlation where justified by empirical

data and/or theory

• Impose each CCSP scenario as an emissions cap over time– Not a fixed radiative forcing target– No banking/borrowing– DO allow GHG trading using GWPs– DO allow trading between nations each period

Uncertainty in CO2 Emissions(No Policy)

2000 2020 2040 2060 2080 2100

Glo

bal C

O2 E

mis

sion

s (G

tC)

0

5

10

15

20

25

30

35

40

90% Bounds50% BoundsStabilization Levels 1-4IPCC SRES

B1

A1B

A1FI

A2

Carbon Prices in 2020a) Carbon Price in 2020

Carbon Price ($/ton CO2)

0 20 40 60 80 100

Pro

babi

lity

Den

sity

0.00

0.02

0.04

0.06

0.08

0.10

0.12Level 4Level 3Level 2Level 1

Level 4: $5

Level 3: $8

Level 2: $20

Level 1: $71

Global Welfare Loss (%) in 2020

a) Uncertainty Global Consumption Losses (%) in 2020

% Loss in Global Consumption0.0 0.5 1.0 1.5 2.0 2.5 3.0

Pro

babi

lity

De

nsity

0

1

2

3

4 Level 4Level 3Level 2Level 1

Level 4: 0.1%

Level 3: 0.2%

Level 2: 0.5%

Level 1: 2.1%

Total Primary Energy (EJ) in 2050

0 100 200 300 400 500

Coal-REF

Coal-Level2

Shale-REF

Shale-Level2

Oil-REF

Oil-Level2

Gas-REF

Gas-Level2

Nuclear-REF

Nuclear-Level2

Hydro-REF

Hydro-Level2

Bio-REF

Bio-Level2

SolarWind-REF

SolarWind-Level2

Uncertaintyin TotalPrimary Energy Sources

2050

Relative Contribution to VarianceCumulative Global CO2 2000-2100 (Reference)

% Variance Explained

0 10 20 30 40

Other

Scale of Economy

Energy Demand

Energy Supply

a) Carbon Price in 2020 (Level 2)

% Variance Explained0 10 20 30 40

Scale of Economy

Other

Energy Supply

Energy Demand

•Energy Supply•Energy Demand•Scale of Economy•Other UncertaintiesPredict which most affect cum. CO2, carbon prices.

Top Ten Drivers of Uncertainty in Abatement Cost

Carbon Price in 2020 (Level 2)


0 5 10 15 20 25 30 35

Markup Shale

GDP

ELAS(CH4)

Elas (L,K)

ESUB(HH)

Markup Bio Oil

AEEI

Oil Supply Elas

Markup NGCC

ELAS(E,LK)

Uncertainty in Climate Parameters

• Emissions Uncertainty from EPPA

• Climate Sensitivity

• Heat & Carbon Uptake by Deep Ocean

• Radiative Forcing Strength of Aerosols

• CO2 Fertilization Effect on Ecosystem

• Trends in Precipitation Frequency

Results: Temperature ChangeImpacts of Stabilization Paths

Global Mean Surface Temperature Increase (oC)(1981-2000) to (2091-2100)

No Policy

Level 1

Level 3

Level 4

Level 2

Results: Sea Level Rise(Excluding Greenland and WAIS)

Sea Level Rise 2000-2100 (cm)(thermal expansion + small glacial melt)

0 20 40 60 80 100

Cu

mul

ativ

e P

rob

abili

ty

0.0

0.2

0.4

0.6

0.8

1.0

No PolicyLevel 4Level 3Level 2Level 1

Communicating the Odds of Temperature Change

Communicating the Impact of PolicyNo Policy Stringent Policy

(~550 ppm)

ΔT > 2oC ΔT > 4oC ΔT > 6oC

No Policy 400 in 400 17 in 20 1 in 4

Stabilize at 750 400 in 400 1 in 4 1 in 400

Stabilize at 650 97 in 100 7 in 100 <1 in 400

Stabilize at 550 8 in 10 1 in 400 <1 in 400

Stabilize at 450 1 in 4 <1 in 400 <1 in 400

USING THE IGSM, WHAT IS THE PROBABILITY OF GLOBAL WARMING for 1980-2100, WITHOUT & WITH A 450, 550, 650 or 750 ppm CO2-

equivalent STABILIZATION POLICY?(400 random samples for economics & climate assumptions)

Sea Level Rise > 0.2m



No Policy 400 in 400 13 in 20 9 in 100

Stabilize at 750 396 in 400 1 in 5 < 1 in 400



Stabilize at 450 7 in 10 <1 in 400 < 1 in 400

USING THE IGSM, WHAT IS THE PROBABILITY OF GLOBAL SEA LEVEL RISE for 2000-2100, WITHOUT & WITH A 450, 550, 650 or 750 ppm

CO2-equivalent STABILIZATION POLICY?(400 random samples for economics & climate assumptions)

ΔWL>1% ΔWL>2% ΔWL>3%

No Policy - - -

Stabilize at 750

1 in 100 1 in 400 <1 in 400

Stabilize at 650

3 in 100 1 in 200 <1 in 400

Stabilize at 550

1 in 4 1 in 50 1 in 200

Stabilize at 450

7 in 10 3 in 10 1 in 10

USING THE EPPA, WHAT IS THE PROBABILITY FOR WELFARE LOSS (% change in 2020), WITHOUT & WITH A 450, 550, 650 or 750 ppm CO2-

equivalent STABILIZATION POLICY?(400 random samples for economics assumptions)

Marginal Reduction in Probability of Exceeding 5oC Global Temperature Change

Probability of

exceeding target

Reduction in Probability

(percentage points)

Cum. CO2 Emissions 2000-2100

(GtC)

Reduction in Cumulative

CO2

Prob/Cum

No Policy 54.0% 1605.0 - -

Stabilize at 750

2.5% 51.5% 1123.1 481.9 0.107%

Stabilize at 650

0.3% 2.3% 910.9 212.2 0.011%

Stabilize at 550

0.0% 0.3% 634.7 276.2 0.001%

Stabilize at 450

0.0% 0.0% 381.1 253.6 0.000%

Tradeoffs in Choosing Stabilization Targets: Expected ValuesTradeoffs in Choosing Stabilization Targets

Expected Values

Expected Global Mean Temperature Change (Degrees C)

0 1 2 3 4 5 6

Exp

ecte

d G

loba

l Wel

fare

Los

s (%

)

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

CCSP 550

CCSP 650

CCSP 750 No Policy

CCSP 450

Risk-Risk Tradeoffs in Choosing Stabilization Targets

Prob{T>4o}

0 20 40 60 80 100 120

Pro

b{G

loba

l WL

> 2

%}

0

5

10

15

20

25

30

35

CCSP 550

CCSP 650 CCSP 750 No Policy

CCSP 450



Prob{Temperature Exceeds Target}

0 20 40 60 80 100 120

Pro

b{G

loba

l WL

> 2

%}

0

5

10

15

20

25

30

35

Target = 3 DegreesTarget = 4 DegreesTarget = 5 DegreesTarget = 6 Degrees

CCSP 550

CCSP 650 CCSP 750

No Policy

CCSP 450


Key Insights

• Economics– GDP growth important, not biggest driver– Energy demand parameters critical– High returns on reducing uncertainties in AEEI,

elasticities of substitution, etc.

• Climate Science– Uncertainty still wide– Mean and upper tails indicate likelihood of significant

impacts without some GHG reductions

Key Insights (II)

• Decision-Making– Problem is one of risk management– Risk-risk tradeoffs give different insights than

focusing on mean/reference values– Suggestive that for a 450ppm, cost risk may

outweigh the reduction in temperature risk

ΔWL>1% ΔWL>2% ΔWL>3%

No Policy - - -

Stabilize at 750

1 in 12 3 in 200 3 in 400

Stabilize at 650

1 in 3 1 in 20 3 in 400

Stabilize at 550

9 in 10 3 in 5 1 in 4

Stabilize at 450

98 in 100 96 in 100 85 in 100

USING THE EPPA, WHAT IS THE PROBABILITY FOR WELFARE LOSS (% change in 2050), WITHOUT & WITH A 450, 550, 650 or 750 ppm CO2-

equivalent STABILIZATION POLICY?(400 forecasts with equally probable economics assumptions)

Uncertainty in CO2 Emissions(No Policy)

2000 2020 2040 2060 2080 2100

Glo

bal C

O2 E

mis

sion

s (G

tC)

0

5

10

15

20

25

30

35

40

No Policy: 90% BoundsNo Policy: 50% BoundsIPCC SRES Marker ScenariosCCSP Product 2.1a Stabilization Scenarios A1-FI

A1-T

A1-B

Level 4 (750ppm)

Level 2 (550ppm)

Why are the probabilities shifted to higher temperatures than in our previous calculations (Webster et al, 2003)?

• Radiative Forcing Increases?– Emissions (higher lower bound)– Reduced Ocean Carbon Uptake– Additional forcing such as Black Carbon &

Tropospheric Ozone (additional forcing included but still calibrated by net aerosols in 1990s)

• Climate Model Response?– Climate Model Parameters show higher

response• Learning?

– Distributions better defined – Distributions shifted higher

IPCC AR4 Temp Chg UncertaintyRelevantComparisonTo IGSMNo Policy

Typical Production Function in EPPA

Uncertainty in SO2 Emissions(No Policy)

Year

2000 2020 2040 2060 2080 2100

Glo

bal S

O2

Em

issi

ons

(TgS

)

0

100

200

300

400

Median50% Probability Bounds90% Probability Bounds

Uncertainty in SO2 Emissions(No Policy vs. CCSP-550)

Year

2000 2020 2040 2060 2080 2100

Glo

bal S

O2 E

mis

sion

s (T

gS)

0

100

200

300

400

No Policy - MedianNo Policy - 90% Probability BoundsClimate Policy - MedianClimate Policy - 90% Probability Bounds

Uncertainty in Methane Emissions

Year

2000 2020 2040 2060 2080 2100

Glo

bal C

H4 E

mis

sion

s (M

t C

H4)

0

200

400

600

800

1000

1200


Uncertainty in NOx Emissions

Year

2000 2020 2040 2060 2080 2100

Glo

bal N

Ox

Em

issi

on

s (T

g N

O2)

0

100

200

300

400

500

600

700


Uncertainty in BC Emissions

Year

2000 2020 2040 2060 2080 2100

Glo

ba

l Bla

ck C

arb

on

Ae

roso

l Em

issi

on

s (T

g)

0

5

10

15

20


Zonal Temperature Change2000-2100 (Median)

Latitude

-80 -60 -40 -20 0 20 40 60 80

Zo

nal T

empe

ratu

re C

hang

e 20

00-2

100

0

2

4

6

8

10

12


Zonal Temperature Change2000-2100 (95th Percentile)

Latitude

-80 -60 -40 -20 0 20 40 60 80

Zon

al T

em

pera

ture

Cha

nge

200

0-2

100

0

2

4

6

8

10

12

14

16

18


PDFs of Global Mean Temp. Chg.

Decadal Average Surface Temperature Change(2090-2100) - (2010-2000)

0 2 4 6 8 10

Pro

babi

lity

De

nsity

0.0

0.2

0.4

0.6

0.8

1.0

1.2

No PolicyCCSP 750 StabilizationCCSP 650 StabilizationCCSP 550 StabilizationCCSP 450 Stabilization

PDFs of Sea Level Rise(Excluding Greenland and WAIS)

Sea Level Rise 2000-2100 (m)(thermal expansion + small glacial melt)

0.0 0.2 0.4 0.6 0.8 1.0

Pro

babi

lity

Den

sity

0

1

2

3

4

5

6

7

No PolicyCCSP 750 StabilizationCCSP 650 StabilizationCCSP 550 StabilizationCCSP 450 Stabilization

Global Electricity Output (EJ) in 2050

0 20 40 60 80 100

Coal-REF

Coal-Level2

Oil-REF

Oil-Level2

Gas-REF

Gas-Level2

NGCC-REF

NGCC-Level2

NGCAP-REF

NGCAP-Level2

IGCAP-REF

IGCAP-Level2

Nuclear-REF

Nuclear-Level2

Hydro-REF

Hydro-Level2

Bio-REF

Bio-Level2

SolarWind-REF

SolarWind-Level2

Global Electricity

Consumption by Technology

and Fuel

a) Carbon Price in 2020 (Level 2)


Scale of Economy

Other

Energy Supply

Energy Demand

b) Carbon Price in 2060 (Level 2)

% Variance Explained0 5 10 15 20 25

Other

Scale of Economy

Energy Supply

Energy Demand

c) Carbon Price in 2100 (Level 2)


Energy Supply

Other

Scale of Economy

Energy Demand

Cumulative Global CO2 2000-2100

(Reference)


0 5 10 15 20 25 30

Nuclear ExpansionVintaging

Markup Bio ElecESUB(Wind/Solar)

PopulationMarkup NGCCMarkup Bio Oil

Resource ShaleMarkup Gas CCS

CCS ExpansionUrban Poll TrendsResource Oil/Gas

ELAS(ELEC,NON)Markup Syn Gas

ESUB(HH)ELAS(N2O)

ELAS(Fuels)NGas Supply Elas

Init CH4 EmiMarkup Coal CCS

ELAS(CH4)Resource CoalInit Urban Emi

Elas (L,K)AEEI

Oil Supply ElasGDP

Markup ShaleELAS(E,LK)

Coal Supply Elas

2000 2020 2040 2060 2080 2100

Glo

bal S

O2

Em

issi

ons

(MtS

)

0

100

200

300

400

90% Bounds50% BoundsWebster et al. (2002)

Historical 1950-2000 (%)Projected Annual Average Growth

Rate (%) 2000-2100

Region Mean Std Dev 0.05 0.5 0.95

USA 2.2 2.3% 1.7 2.1 2.5

CAN 2.3 2.3% 1.7 2.1 2.5

MEX 2.2 5.2% 1.2 2.1 2.9

JPN 4.9 3.5% 1.7 2.2 2.7

ANZ 2.0 1.8% 2.0 2.3 2.6

EUR 2.8 1.6% 1.9 2.1 2.4

EET 1.1 3.9% 2.1 2.8 3.3

FSU 1.1 5.3% 2.0 2.8 3.7

ASI 4.3 4.7% 1.8 2.6 3.3

CHN 4.3 3.7% 2.5 3.1 3.7

IND 2.3 2.7% 2.3 2.7 3.1

IDZ 2.7 5.0% 1.1 2.6 3.9

AFR 1.0 1.8% 2.0 2.3 2.6

MES 2.3 3.3% 1.5 2.1 2.6

LAM 1.7 2.0% 1.7 2.1 2.5

ROW 2.2 3.5% 1.7 2.3 2.8

GLOBAL 2.2 2.4 2.6

a) Fossil Resources

Exajoules

0 5e+5 1e+6 2e+6 2e+6

Pro

babi

lity

Den

sity

0

5e-6

1e-5

2e-5

2e-5

3e-5

3e-5

Crude OilNatural GasCoalShale

b) Fossil Fuel Supply Elasticity

Price Elasticity of Supply

0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4

Pro

babi

lity

Den

sity

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

2000 2020 2040 2060 2080 2100

Glo

bal P

opul

atio

ns (

Bill

ions

)

0

2

4

6

8

10

12

14

90% Bounds50% BoundsUN Projections

Time Trend Parameter for Urban Pollutant ()

-0.08 -0.06 -0.04 -0.02 0.00

Pro

ba

bili

ty D

en

sity

0

20

40

60

80

100

120

SO2

NOx

Fractile Expert 1 Expert 2 Expert 3

5% 2.0 2.1 2.5

50% 3.5 4.3 4.3

Synthetic Oil Markup

95% 5.0 5.8 6.0

5% 3.4 1.9 3.9

50% 4.3 3.0 5.2

Coal Gasification

Markup 95% 6.5 6.5 6.9

Expert 4 Expert 5

5% 1.1 1.1

50% 1.1 1.2

Advanced Coal with Carbon

Capture 95% 1.4 1.3

5% 1.1 1.1

50% 1.2 1.2

Natural Gas with Carbon

Capture 95% 1.3 1.2

5% 0.8 0.9

50% 0.9 0.9

Natural Gas Combined

Cycle 95% 1.0 1.0

Share of Non-Malleable Capital

0.0 0.2 0.4 0.6 0.8 1.0

Pro

babi

lity

Den

sity

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Carbon Price Under Level 1 (450ppm)

Carbon Price in 2050 ($/ton CO2)

100 200 300 400 500

Pro

babi

lity

De

nsity

0.000

0.001

0.002

0.003

0.004

0.005

0.006

IGSM:$233

MERGE: $159

MiniCAM: $129

Documents

Long-term Greenhouse Gas Stabilization and the Risks of Dangerous Impacts