A Simple Coupled Climate─economy─biosphere Model
Ogutu, Keroboto B. Za'Ngoti
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The goal of this thesis is to build a reduced-complexity model of coupled climate─economy─biosphere interactions, which uses the minimum number of variables and equations needed to capture the fundamental mechanisms involved and can thus help clarify the role of the different variables and parameters. The Coupled Climate─Economy─Biosphere (CoCEB) model described herein takes an integrated assessment approach to simulating global change. By using an endogenous growth module with physical and human capital accumulation, this thesis considers the sustainability of economic growth, as economic activity intensifies greenhouse gas emissions that in turn cause economic damage due to climate change. Various climate change mitigation policy measures are considered. While many integrated assessment models treat abatement costs merely as an unproductive loss of income, this thesis considers abatement activities also as an investment in increase of overall energy efficiency of the economy and decrease of overall carbon intensity of the energy system. One of the major drawbacks of integrated assessment models is that they mainly focus on mitigation in the energy sector and consider emissions from land-use as exogenous. Since greenhouse gas emissions from deforestation and current terrestrial uptake are significant, it is important to include mitigation of these emissions in the biota sinks within integrated assessment models. Several studies suggest that forest carbon sequestration can help reduce atmospheric carbon concentration significantly and is a cost efficient way to curb the prevailing climate change. This thesis also looks at relevant economic aspects of deforestation control and carbon sequestration in forests as well as the efficiency of carbon capture and storage (CCS) technologies as policy measures for climate change mitigation. Because full realistic coupled climate models are so complex, analyses of the various potential feedbacks between climate, economy, and biosphere have been rather limited. Potentially important mechanisms are better initially described in low or intermediate complexity models. The CoCEB is a formal framework in which it is possible to represent in a simple way different elements of the coupled system and their interactions. The model developed, being an exercise in simplicity and not a predictive tool for climate change impacts, brings together and summarizes information from diverse literature on climate change mitigation measures and their associated costs, and allows comparing them in a coherent way. The model is, of course sensitive, to the choice of key parameters and in particular the parameters setting the costs of the different means of climate change mitigation: the parameter values tested span the range of cost values found in literature. The thesis shows that: i) investment in low-carbon technologies helps to reduce the volume of industrial carbon emissions, lower temperature deviations, and lead to positive effects in the long term economic growth; ii) low investment in CCS contributes to reducing industrial carbon emissions and to increasing gross domestic product (GDP), but further investment leads to a smaller reduction in emissions, as well as in the incremental GDP growth; iii) enhanced deforestation control contributes to a reduction in both deforestation emissions and atmospheric carbon dioxide concentration, thus reducing the impacts of climate change and contributing to a slight appreciation of GDP growth, an effect that is very small, though, compared to that of lowcarbon technologies or CCS; and iv) the results in i) and ii) remain very sensitive to the formulation of technological improvements costs. To the contrary, the results for deforestation control are less sensitive to the formulation of its cost. A large range of hypotheses on these costs appear in the literature, and our modeling framework permitted to span this range and check the sensitivity of results The sensitivity study is not intended to make precise calibrations; rather, it is meant to provide a tool for studying qualitatively how various climate policies affect the economy.