Methodological aspects of recent climate change damage cost studies
Authors
Onno Kuik
Vrije Universiteit
Barbara Buchner
International Energy Agency
Michaela Catenacci
Fondazione Eni Enrico Mattey
Alessandra Goria
Fondazione Eni Enrico Mattey
Etem Karakaya
European Environment Agency
Richard Tol
Vrije Universiteit
Keywords:
Climate change damage costs, cost of inaction, methodological aspects, risk and uncertainty, discounting, equity.
Abstract
This paper discusses methodological aspects of recent climate change damage studies. Assessing the total and/or marginal damage costs of environmental change is often difficult and it is certainly difficult in the case of climate change. A major obstacle is the uncertainty on the physical impacts of climate change, especially related to extreme events and so-called 'low-probability high-impact' scenarios. The subsequent transposition of physical impacts into monetary terms is also a delicate step, given that climate change impacts involve both market and non-market goods and services, covering health, environmental and social values, and that impacts may be distant in time and space. The complexity of climate change cost assessment thus involves several crucial dimensions, including non-market evaluation, risk and uncertainty, baseline definition, equity and discounting. The paper discusses these issues and stresses the importance of political perspectives in integrated assessment research.