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Will Fulwider
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Comments on Michael Toman's Climate Change Risks and Policies: An Overview Toman's piece maintains a macro-level view of how human society, invariably through the policy changes, should address the issue of a changing climate. He submits a six step framework of thinking comprehensively about risks, thinking long term, addressing adaptation, thinking internationally, keeping distributional issues in mind, and estimating control costs comprehensively and realistically. While including some seemingly obvious steps this comprehensive analysis affords policy makers a criterion through which holistic policies can address the multifarious nature of climate change. Of particular note is the scope through which action on climate change is executed. Effects of climate change will be felt by U.S. on a local level, rising sea level, increased hurricane frequency, etc., but curbing the disastrous effects of climate change requires international and national cooperation. Toman does not explicitly state the models he used in establishing and running this framework, however in class we addressed multiple models that Toman undoubtedly used. His initial step, thinking comprehensively about risk, focuses on those things that would be affected by climate change and details agriculture, wetlands, and human health, among others. In order to think comprehensively about risks, we must think about both market and non-market goods/resources, therefore using marginal abatement costs would help to ascertain the costs of cutting emissions. The marginal damages function is useful in calculating the possible costs inflicted upon these systems by climatic change. Using non-market valuation techniques would help address issues dealing with natural resources like the wetlands Toman mentions, or as we mentioned in class, deforestation. Using a production possibilities frontier, Toman could determine that climate change would push in the PPF of timber vs. hiking in a forest and if forest management was want to sustain the same levels of timber extraction as before climate change, hiking possibilities would be significantly reduced. Another option that could easily quantify the risk associated with decreased hiking due to climate change driven deforestation would be to utilize a travel cost analysis to see how much people had paid to travel further for forested land because of decreased hiking opportunities. The above is an example of how many different models that we have used in class are inferred through Toman's work, and he likely uses most of the models for each section of his framework. For example, thinking long term would also look into abatement cost curves as time would push in the marginal abatement cost curve, thereby decreasing emissions without changing the price of the tax. Addressing adaptation would delve into how new technologies would possibly reduce abatement costs, lower the cost of marginal damages, or even expand the PPF. Schrag and Toman concur on the need for a flexible timescale for reducing emissions. The problems associated with GGH are not as detrimental with regards to rate, but rather cumulative. This notion along with the need for economic incentives to reduce emissions I think to be two of the most important policy takeaways from the paper. Rather than enacting command and control policies, policy makers need to take in mind the adage that firms respond to incentives and incentivize reducing emissions, either through a tax, permits, or subsidies. While he notes this importance he does not delve into too much detail about introducing these policies and wrapping them up within flexible timescales; the inherent fault of such macro investigations. I would ask Toman timescales he proposes for introducing tax policies like we discussed in class, and how to weigh the importance of curtailing emissions, keeping in mind the residence time of CO2, with creating realistic outcomes.
Toggle Commented Mar 21, 2014 on Paper for Thursday at Jolly Green General
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Mar 21, 2014