7.10 Countries with economies in transition: The potential for cost-effective reductions in energy use is apt to be considerable but the realizable potential will depend upon what economic and technological development path is chosen, as well as the availability of capital to pursue different paths. A critical issue is the future of structural changes in these countries that are apt to change dramatically the level of baseline emissions and the emission reduction costs. 7.11 Developing countries: Analyses suggest that there may be substantial low-cost fossil fuel carbon dioxide emission reduction opportunities for developing countries. Development pathways that increase energy efficiency, promote alternative energy technologies, reduce deforestation and enhance agricultural productivity and biomass energy production can be economically beneficial. To embark upon this pathway may require significant international cooperation and financial and technology transfer. However, these are likely to be insufficient to offset rapidly increasing emissions baselines, associated with increased economic growth and overall welfare. Stabilization of carbon dioxide emissions is likely to be costly. 7.12 Cost estimates for a number of specific approaches to mitigating emissions or enhancing sinks of greenhouse gases vary widely and depend on site-specific characteristics. This is true for renewable energy technologies, for example, as well as carbon sequestration options. The latter could offset as much as 15-30% of 1990 global energy-related emissions each year in forests for the next 50 years. The costs of carbon sequestration, which are competitive with source control options, differ among regions of the world. 7.13 Control of emissions of other greenhouse gases, especially methane and nitrous oxide, can provide significant cost-effective opportunities in some countries. About 10% of anthropogenic methane emissions could be reduced at negative or low cost using available mitigation options for such methane sources as natural gas systems, waste management, and agriculture. Costs differ between countries and regions for some of these options. Subsidies, Market Imperfections and Barriers 7.14 The world economy and indeed some individual national economies suffer from a number of price distortions which increase greenhouse gas emissions, such as some agricultural and fuel subsidies and distortions in transport pricing. A number of studies of this issue indicate that global emissions reductions of 4 to 18% together with increases in real incomes are possible from phasing out fuel subsidies. 7.15 Progress has been made in a number of countries in cost-effectively reducing imperfections and institutional barriers in markets through policy instruments based on voluntary agreements, energy efficiency incentives, product efficiency standards and energy efficiency procurement programs involving manufacturers, and utility regulatory reforms. Where empirical evaluations have been made, many have found that the benefit-cost ratio of increasing energy efficiency was favourable, suggesting the practical feasibility of realizing “no regrets” potentials at negative net cost. Value of Better Information and Research 7.16 The value of better information about the processes, impacts of and responses to climate change is likely to be great. Analysis of economic and social issues related to climate change, especially in developing countries, is a high priority for research. Further analysis is required concerning effects of response options on employment, inflation, trade, competitiveness and other public issues. 8.1 The scientific, technical, economic and social science literature does suggest ways to move forward towards the ultimate objective of the Convention. Possible actions include mitigation of climate change through reductions of emissions of greenhouse gases and enhancement of their removal by sinks, adaptation to observed and/or anticipated climate change, and research, development and demonstration to improve our knowledge of the risks of climate change and possible responses. 8.2 Uncertainties remain which are relevant to judgement of what constitutes dangerous anthropogenic interference with the climate system and what needs to be done to prevent such interference. The literature indicates, however, that significant "no regrets" opportunities are available in most countries and that the risk of aggregate net damage due to climate change, consideration of risk aversion and the precautionary approach, provide rationales for actions beyond "no regrets". The challenge is not to find the best policy today for the next 100 years, but to select a prudent strategy and to adjust it over time in the light of new information. 8.3 The literature suggests that flexible, cost-effective policies relying on economic incentives and instruments as well as coordinated instruments, can considerably reduce mitigation or adaptation costs, or can increase the cost-effectiveness of emission reduction measures. Appropriate long-run signals are required to allow producers and consumers to adapt cost-effectively to constraints on greenhouse gas emissions and to encourage investment, research, development and demonstration. 8.4 Many of the policies and decisions to reduce emissions of greenhouse gases and enhance their sinks, and eventually stabilize their atmospheric concentration, would provide opportunities and challenges for the private and public sectors. A carefully selected portfolio of national and international responses of actions aimed at mitigation, adaptation and improvement of knowledge can reduce the risks posed by climate change to ecosystems, food security, water resources, human health and other natural and socio-economic systems. There are large differences in the cost of reducing greenhouse gas emissions, and enhancing sinks, among countries due to their state of economic development, infrastructure choices, and natural resource base. International cooperation in a framework of bilateral, regional or international agreements could significantly reduce the global costs of reducing emissions and lessening emission leakages. If carried out with care, these responses would help to meet the challenge of climate change and enhance the prospects for sustainable economic development for all peoples and nations. DRAFTING TEAM FOR THE SYNTHESIS 1. Bert Bolin (Chairman of the IPCC and Chairman of the Drafting Team) 2. IPCC, 1992: (i) Cimate Change, The IPCC Scientific Assessment (i) Climate Change 1992, The Supplementary Report to the IPCC Scientific Assessment (ii) Climate Change 1992, The Supplementary Report to the IPCC Impacts Assessment Climate Change 1994, Radiative Forcing of Climate Change and an 3. IPCC, 1994: 4. IPCC, 1995: (i) Climate Change 1995, The IPCC Synthesis (ii) Climate Change 1995, The Science of Climate Change Climate Change 1995, Scientific-Technical Analyses of Impacts, (iv) Climate Change 1995, The Economic and Social Dimensions of Organizations* Responding to the IPCC Working Group II Office and to the U.S. Government During Government Review Phase of the IPCC WG II Second Assessment Report (3/6/95-4/28/95 - First Draft) (9/15/95-10/6/95 - Final Draft) *Other categories responding included national governments and scientific experts. Figure B4: The distribution of the change of surface air temperature (°C) simulated near the time of CO2 doubling by four coupled ocean-atmosphere GCMs in response to a transient CO2 increase. (a) The GFDL results are averaged over years 60-80 and referenced to the 100-year average of a control; (b) the MPI results are averaged over years 56-65 and referenced to the corresponding years of a control; (c) the NCAR results are averaged over years 31-60 and referenced to the corresponding control years; (d) the UKMO results are averaged over years 65-75 and are referenced to the corresponding years of a control. (Manabe et al., 1991; U. Cubasch, G.A. Meehl and J.F.B. Mitchell, all by personal communication.) |