Society For Risk Analysis Annual Meeting 2017

Session Schedule & Abstracts

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Common abbreviations

Symposium: Modeling the Economic Aspects of Climate Change: A Critical Review of the State of the Science

Room: Salon A   1:30 pm–3:00 pm

Chair(s): Elisabeth Gilmore

Sponsored by Economics and Benefits Analysis Specialty Group and Society for Benefit-Cost Analysis

The Social Cost of Carbon (SCC) is a monetized estimate of the social welfare benefits of the avoided climate impacts from reducing carbon dioxide (CO2) emissions by one ton in a given year. This estimate should include a comprehensive set of damages, including risks to human health and changes in labor productivity, impacts from flooding and sea-level rise to human settlements and infrastructure, and measures of social stability such as crime, social unrest and violent conflict. In this symposium, we conduct a critical review of approaches to characterizing and modeling climate impacts and their economic damages for a range of endpoints. We situate these talks within the context of the recommendations for revising the SCC from the National Academies of Sciences, namely updating and improving sectoral estimates, scaling damages along key physical and socioeconomic parameters, capturing adaptation costs, and characterizing interactions, non-gradual changes and uncertainty.

M3-A.1  1:30 pm  An assessment of opportunities to improve the climate damage functions in the DICE, FUND, and PAGE integrated assessment models. . Rennert KJ*, Wichman C; Resources for the Future

Abstract: Resources for the Future is leading a multi-institution initiative to address the full set of near-term recommendations of the National Academies of Sciences (NAS) and provide a comprehensive update of the social cost of carbon estimation process. This broad effort will incorporate advances throughout the components of the social cost of carbon estimation process -- socioeconomic projections, climate system modeling, climate damage estimation, and discounting – and generate an updated estimate of the social cost of carbon along with associated uncertainty. A key aspect of the comprehensive update will be the evaluation of the existing set of model damage components, removal those components without clear empirical basis or articulated expert rationale, and the updating of the remaining set of damage components to be consistent with the current state of the peer-reviewed literature on climate damages. In this presentation we highlight results from a detailed review of the existing set of damage functions employed by the integrated assessment models employed by the Interagency Working Group on the Social Cost of Carbon (DICE, FUND, PAGE), focused on the underlying studies, calibration protocols, and uncertainty quantification, and discuss the development of scientific and transparency criteria for evaluating damage functions and their underlying studies that are consistent with the recommendations from the NAS report. We provide specific focus on three sectors for which the current state of the literature offers clear opportunities for updating the existing set of damage functions – energy usage, human health, and agriculture.

M3-A.2  1:50 pm  Quantifying economic risks from climate change: research opportunities and challenges. Diaz D*; Electric Power Research Institute

Abstract: Climate change poses an extremely wide-ranging set of risks to society that cut across multiple dimensions. Quantifying and aggregating these climate risks is extremely challenging due to the complex uncertainty that pervades the coupled human-earth system, the long time horizon of the problem with temporal dynamics like thermal inertia and other lags, and the heterogeneous nature of climate impacts across regions, sectors, and generations. Nevertheless, estimating the economic damages of climate change is critically important for policy decisions and climate risk management: it tells us how the benefits of reducing greenhouse gas emissions stack up against the costs, as well as the value of spending on climate mitigation relative to other social investments. The social cost of carbon (SCC) is a metric that is increasingly being used to explore trade-offs between the welfare costs and benefits (avoided risks) of climate change mitigation. The SCC value is estimated with integrated assessment models (IAMs) designed for cost-benefit analysis that represent key components of the human and earth system and monetize climate impacts. Current modeling approaches use damage functions to parameterize a simplified relationship between climate variables, like temperature change, and economic welfare. These damage functions are often dismissed due to a number of limitations that we review and synthesize here but could be substantially improved by incorporating recent advances and empirical findings from impacts, adaptation and vulnerability (IAV) research. This, in turn, would substantially improve the robustness of SCC values estimated with these damage functions. This talk will describe the opportunities and challenges associated with integrating these research advances into decision-support integrated assessment models, in the context of the recent National Academy of Sciences recommendations for climate damage functions.

M3-A.3  2:10 pm  Current approaches to assessing risks of sea-level rise. Kopp RE*; Rutgers University

Abstract: Sea-level rise (SLR) and the associated amplification of the frequency of coastal flooding rank among the most prominent consequences of climate change. Over the last decade, driven by the needs of regional and national risk assessments, SLR projections have taken on an increasingly probabilistic and localized character. Attempts to assess the effects of SLR on tidal and storm-driven flooding have employed both extreme-value theory applied to tide-gauge data and also physical models, the latter primarily in the context of tropical cyclones. Despite these advances, SLR in the second half of this century and beyond remains an area of deep uncertainty, due primarily to limited understanding of ice-sheet physics. Some local decision frameworks for managing SLR risks have focused primarily on physical endpoints. SLR allowances, for example, assess the vertical increment of protection needed to maintain the current risk level for a certain time period. Adaptive management frameworks have also been used in some contexts. Economic risk analyses of SLR have taken several forms. The theoretically simplest rely on current spatial patterns of exposure and model the value at risk due to permanent and episodic flooding, with no or limited systematic treatment of coastal adaptation. Analyses grounded in the most detailed empirical data and storm modeling have tended to take this form. The next simplest use benefit-cost analysis to select optimally among a small number of idealized response options. One frontier approach in SLR economic risk analysis involves agent-based modeling of adaptation decision making; so far, this approach has only been applied at local scale. Another frontier approach involves high-resolution, dynamic modeling of the reallocation of population and technology from flooded areas and toward continental interiors. To date, this approach has only been applied in an idealized context neglecting intermittent flooding and adaptations other than retreat.

M3-A.4  2:30 pm  Projecting violence and unrest under climate change. Gilmore EA*; Clark University

Abstract: The potential for climate change to increase or alter occurrences of violence, such as civil war, riots, and crime, are amongst the more contested endpoints. While a few prominent studies have found statistical support for strong and direct associations between climate and many diverse forms of violence, other analyses have revealed more inconsistent and conditional relationships. Here, we provide a critical review of the state of the understanding across a number of endpoints drawing upon evidence from a range of disciplines. Further, we investigate the state of projecting these endpoints over future socioeconomic and climate scenarios with a specific focus on capturing the endogeneity of conflict and economic growth as well as other interactions between climate change, socioeconomic conditions and adaptive capacity. We conclude by making recommendations on how to model these relationships for efforts, such as the Social Cost of Carbon (SCC).

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