Halting or slowing deforestation is probably one of the most urgent and cost-effective options. However, social, political, and infrastructural barriers may restrict this option as well as the scope of reforestation,

Estimates of cost-effectiveness of forestry measures depend strongly on whether one takes a static or dynamic point of view. There is a clear tendency to focus increasingly on cost functions rather than point estimates; the former approach seems clearly more relevant in the case of large areas. Moreover, the cost assessment methodology has been increasingly refined (for example, by the inclusion of discounting procedures). Cost estimates, which are now probably more realistic, tend to fall within a range of $30-$60/tC for large annual uptakes.

With respect to methane, the emission data available reveal wide discrepancies between various regions. Information about methane leakage and distribution is also rather scanty, and some of it is unreliable. The same applies to information about the costs of methane control options.

Information about the cost functions of the various mitigation options is still weak. That is because the functions are not only time-specific but also region- and context-specific. This [WHAT DOES "THIS" REFER TO?] also relates to the puzzling fact [WHY PUZZLING?] that the scope for no-regret options seems to be significant, especially in developing countries. This apparent scope is most likely due to the high actual time preference rates, lack of information, and [limitations of?] human capacity. All this and the different assessment perspectives mentioned earlier may explain why virtually no studies exist in which the optimal mix of options is designed on the basis of their underlying cost functions and feasibility.

The few studies of this kind that have been done provide only tentative results but do indicate - given present knowledge about the cost functions of the various options that the pure application of the cost minimization principle would require a significant share (probably more than half) of the emission reduction targets to be achieved via the application of options outside the OECD area. In addition, in terms of the size of the emission reduction, energy conservation and efficiency improvements and the forestry option seem to provide the largest potential from a cost minimization point of view. The potential of the forestry option is widely debated, however, because of the limitations of net absorption in time and because much depends on forest exploitation and local acceptance.

To illustrate the former [i.e. THE POINT ABOUT APPLICATION OF OPTIONS OUTSIDE THE OECD?], the result of a (LP-based [LP=?]) cost minimization simulation using the available cost function information in terms of eest functions-disaggregated by region is presented in Table 1 [IS THIS A NEW TABLE FOR THIS SUMMARY?] for a predetermined emission reduction target of 2.4 GtC. In view of the tentative and uncertain character of the underlying data, the outcomes can only be seen as an illustration of what an optimal policy mix might be (recognizing that marginal costs per option per region generally tend to increase to the point where they eventually become prohibitive). Obviously technological or political breakthroughs may significantly affect the optimal mix.

Adaptation options can be surveyed in many ways. One is to consider what should be adapted to and how it should be done. No systematic cost data on the various adaptation options are available, although information about land protection costs against flooding and sea level rise is rapidly increasing. Many efforts are now underway, however, to reduce the vulnerability of agricultural production to climate change through adaptation policies. Especially in developing countries there is an urgent need for both more information and a better infrastructure for the actual implementation of adaptation techniques.

Finally, the point has to be made that when it comes to the introduction and application of the various options, the developing countries occupy a special position. That is because the application and acceptance of these options often crucially depends on the international transfer of technologies as well as the countries' own local institutions and abilities to build their human capacity. Therefore, the conditions needed to ensure the success of these processes, such as joint implementation and technology transfers from developed to developing countries, deserve a high priority on the academic research agenda.

7.1. Introduction

In recent years a host of response options has been proposed in order to cope with possible climate change. These options can be classified in many ways, including by technology, by sector, by impact, and by strategic approach. This chapter is based on classification by strategic approach, that is, mitigation, adaptation, and indirect policy options. Many response options are thoroughly discussed in Volume 2 of this report, with a major emphasis on technological feasibility (IPCC 1996). Some aspects of these options will be taken up here and generically-assessed generically, that is, not only from an engineering efficiency point of view but also from that of welfare economics.1

The present chapter surveys the set of options that are feasible from a comparative economic perspective in order to assess the scope and priorities of potential policies. The main purposes are:

to set up a structure so that the various options can be put into proper perspective and the assessment to be made can be truly generic (Section 7.2);

to discuss the various criteria that can be used in assessing the options and the degree to which different criteria can produce different choices in terms of optimal use of the options (Section 7.3);

to review the various options in terms of (technical and practical) applicability, cost-effectiveness, and social acceptability, both as far as mitigation options (Section 7.4), and adaptation options (Section 7.5) are concerned. Special attention will be given to the case of the developing countries and countries in transition, because of their particular circumstances;

to evaluate the scope for integrating response options, in particular, with respect to mitigation options on the basis of information about regional cost functions (Section 7.6);

to analyze to what extent currently available information about various options might provide a basis for international policy cooperation (Section 7.7).

Sections 7.1 to 7.3 therefore provide the methodological base; Sections 7.4 and 7.5 survey the mitigation and adaptation options, and Sections 7.6 and 7.7

deal with response options and policy application. In this chapter the applicability, feasibility, and cost-effectiveness of the various response options are surveyed; however, a macroeconomic effects assessment of the various options has not been carried out here. (See in this respect also the sections in this report dealing with integrated response options.)

7.2. A Conceptual Framework

Figure 7.1 shows the policy options available to counter greenhouse warming and their possible feedbacks.

Figure 7.1. Schematic overview of available options to counter the greenhouse effect and their possible feedbacks.

The diagram may serve to illustrate that one can basically distinguish between three strategic categories of options in order to deal with the greenhouse issue:

1.

2.

3.

mitigation options (Block A in the figure) are options that, amongst others, strive to prevent climate change, or combat any reinforcement thereof, by reducing the net emissions of greenhouse gases into the atmosphere, either by reducing greenhouse gas emissions (source-oriented measures) or by increasing the sinks for greenhouse gases (effect-oriented measures). See also Chapter 8, Section 8.2.2.2;

adaptation options (Block B) are options that focus on reducing the expected damages due to rapid climate change by combating or avoiding their detrimental effects;

indirect policy options (Block C) are options that are not directly related to the emission or capture of greenhouse gases but that can have a considerable indirect effect on greenhouse gas emissions or greenhouse gas uptake.

Obviously, the various types of options are not mutually exclusive, nor can they be fully separated. Indirect policy options, adaptation options, and mitigation options may even reinforce each other. For example, a population policy, as part of a broader policy mix that slows down population growth in a densely populated

country, may contribute to finding cost-effective and acceptable opportunities for mitigation options. Similarly, if policies designed to decrease the energy and materials-intensity of energy and materials use of economic activity are instituted in a country, many technically feasible options for emission reductions may become cost-effective. Technological progress will obviously improve the scope for adaptation and other options. For conceptual reasons, however, the preceding distinction between the various types of options seems a useful starting point. Before moving on to the details, though, it would be only proper to point out what this chapter is not about. Only the broad principles underlying the response options are emphasized here. Their actual application would depend on a host of factors that are very much country-specific and include many economic, social, political, and legal considerations. Thus, they would need to be analyzed on a country-by-country basis for policymaking at national levels.

7.21 Mitigation Options

In the literature about greenhouse policy options, mitigation options receive by far the most attention. Most commonly the various options are discussed separately and from the engineering perspective. Information about the cost-effectiveness of the various options, for example, in terms of $/tC not released into the atmosphere, is rapidly increasing. The marginal cost-effectiveness of the various options is probably highly dependent on the scale of application, the sector, the country or region of application, and whether or not additional options are applied. Moreover, learning curves, and therefore cumulative application and time, almost invariably play a dominant role in determining the options' economic viability. All these factors point in the same direction, namely, that the mitigation options' cost functions may change in the course of time, sometimes quite rapidly. The same applies with respect to the various options' social and political acceptability. Conclusions about the economic, social, and political viability of various options are therefore highly scale-, time- and location-specific.

In discussing the potential of the various mitigation options a distinction has been made between measures concerning CO2 and measures concerning other greenhouse gases, because the former are in actual practice largely associated with energy-related activities (i.e., both energy production and consumption) while the latter are also associated with other types of activities. Thus, except for some "exotic," mainly effect-oriented options such as geoengineering, orbital shades, iron fertilization, creating algal blooms, and weathering rocks, mitigation options can generally be divided into those affecting CO2 and those affecting other greenhouse gases.