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11. Global Warming, Uncertainty, Irreversibility & LongTerm Policymaking (SPRING 2002)

11. Global Warming, Uncertainty, Irreversibility & LongTerm Policymaking (SPRING 2002) Larry D. Sanders Dept. of Ag Economics Oklahoma State University INTRODUCTION (ch. 10 Hackett) Purpose:

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11. Global Warming, Uncertainty, Irreversibility & LongTerm Policymaking (SPRING 2002)

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  1. 11.Global Warming, Uncertainty, Irreversibility & LongTerm Policymaking(SPRING 2002) Larry D. Sanders Dept. of Ag Economics Oklahoma State University

  2. INTRODUCTION (ch. 10 Hackett) • Purpose: • to become aware of the concept of uncertainty & irreversibility with respect to environmental & natural resource policies • Learning Objectives. To understand/become aware of: 1. To understand uncertainty & irreversibility. 2. To become aware of the issue of global warming. 3. To consider the policy options with respect to possibly irreversible actions/events such as global warming.

  3. Background on concepts • Uncertainty--involves the probability that some event/action will or will not occur • precipitation • new technology • Irreversibility--suggests that some action/event will transform a resource to the extent it cannot be returned to its original state, limiting future options • clear-cutting a forest • draining a wetland • damming a river

  4. Risk Perceptions: may vary w/knowledge, severity of result, whether individual choice . . . Unknown Risk Desire for regulation Nitrogen Fertilizers Nitrites x x x RadioactiveWaste x Pesticides x X Global warming Lead Paint x Caffeine DDT Minor Risk x Severe Risk Skate- boarding x x Smoking x Nuclear War Rec. Boating x x Commercial Flying x Handguns Adapted from Carlson et al. Agricultural & Environmental Resource Economics, 1993; also Sanders Known Risk

  5. Case Study: Global Warming--background • Greenhouse gases--carbon dioxide, chlorofluorocarbons, methane, nitrous oxide, ozone, hydrofluorocarbons, perfluorinated carbons • Their function--filter solar energy, limiting infrared energy radiated back in to space • Greenhouse effect--as greenhouse gas concentration increases, capturing of infrared energy increases, & temperatures are likely to rise

  6. The Importance of Greenhouse Gases • Provides a blanket that “insulates the Earth by trapping heat, a lot like panes of glass in a greenhouse. . . ‘part of what makes the planet of work’. • “Without greenhouse gases, the Earth would be much too cold for comfort . . . problem now is that humans are thickening the blanket . . . & . . . nature’s thermostat is nudged up.” --From cnn.com special section on global warming article “Messing with the thermostat can be devastating”, Miles O’Obrien, November 27, 1997.

  7. Sea level will rise 2-3 feet, covering many islands, changing coast lines & contaminating water supplies Southern US climate becomes tropical changing ag production Northern US climate moderates, more like Southern US today Increase in heat-related deaths/diseases (malaria, dengue fever) Only 24% of public is concerned Models under-estimate complex global ecosystem (can’t predict 7 days out, much less years) Models under-estimate the “technological fix” & market economics Doubtful that government intervention will do anything but create more immediate problems The Claims about Global Warming:“It’s Real”“Skeptical”

  8. Case Study: Global Warming --Science in Conflict • Scientists continue to debate both 1. whether global warming is in fact occurring, & 2. the level of severity of impact • Trade-offs: 1. If predictions are true & nothing done to stop it, large-scale changes in global climate that will severely affect the planet & our geo-political-economic system. 2. If predictions are not true but actions are taken to minimize global warming (Kyoto Agreement), wide-scale economic impacts on the US will reduce competitiveness (30-50% increase in fuel & utility bills).

  9. If Global Warming Perceived as Market Failure S’=MCs S=MCp Price P2 D=MBp=MVp=MWTPp=MBs P1 Quantity Q2 Q1

  10. Major Contributors to Greenhouse Gases Per Capita Energy Country Emissions (%) Consumption (mil. Btu) US 19 335 China 10 Japan 5 171 Brazil 4 33 Germany 4 India 4 UK 2 169 Indonesia 2 Italy 2

  11. Issues & Options with Global Warming • KEY ISSUES: • Time Perspective? • Sources? • Geography (Trans-national?) • Irreversibility? • Science? • FREE MARKET • RESEARCH & EXTENSION • REGULATION • SUBSIDIES

  12. Other Sources http://cnn.com/TECH (see interactive features; see global warming 101)

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