Abstract
We start from the observation that climate targets under uncertainty should be interpreted as safety constraints on the probability of crossing a certain threshold, such as 2°C global warming. We then highlight, by ways of a simple example, that cost-effectiveness analysis for such probabilistic targets leads to major conceptual problems if learning about uncertainty is taken into account and the target is fixed. Current target proposals presumably imply that targets should be revised in the light of new information. Taking this into account amounts to formalizing how targets should be chosen, a question that was avoided by cost-effectiveness analysis. One way is to perform a full-fledged cost-benefit analysis including some kind of monetary damage function. We propose multi-criteria decision analysis including a target-based risk metric as an alternative that is more explicite in its assumptions and more closely based on given targets.
References
Azar C, Lindgren K (2003) Editorial commentary: catastrophic events and stochastic cost-benefit analysis of climate change. Clim Change 56(3)
Blau RA (1974) Stochastic programming and decision analysis: an apparent dilemma. Manage Sci 21(3):271–276
Bordley RF, Pollock SM (2009) A decision-analytic approach to reliability-based design optimization. Oper Res 57(5):1262–1270
Bosetti V, Carraro C, Sgobbi A, Tavoni M (2009) Delayed action and uncertain stabilisation targets: how much will the delay cost? Clim Change 96(3):299–312
Charnes A, Cooper WW (1959) Chance constrained programming. Manage Sci 5:73–79
Charnes A, Cooper WW (1975) A comment on Blau’s dilemma in stochastic programming and bayesian decision analysis. Manage Sci 22(4):498–500 .
Charnes A, Cooper WW (1983) Response to “Decision problems under risk and chance constrained programming: dilemmas in the transition”. Manage Sci 29(6):750–753
den Elzen MGJ, Meinshausen M (2005) Meeting the EU 2°C climate target: global and regional emission implications. Report 728001031:2005
den Elzen MGJ, Meinshausen M, van Vuuren DP (2007) Multi-gas emission envelopes to meet greenhouse gas concentration targets: costs versus certainty of limiting temperature increase. Glob Environ Change Human Policy Dimensions 17(2):260–280
den Elzen MGJ, van Vuuren DP (2007) Peaking profiles for achieving long-term temperature targets with more likelihood at lower costs. Proc Natl Acad Sci 104(46):17931
Eisner MJ, Kaplan RS, Soden JV (1971) Admissible decision rules for the E-model of chance-constrained programming. Manage Sci 17(5):337–353
European Council (2005) Presidency conclusions. European Council, Brussels
Held H, Kriegler E, Lessmann K, Edenhofer O (2009) Efficient climate policies under technology and climate uncertainty. Energy Econ 31:S50–S61
Hogan AJ, Morris JG, Thompson HE (1981) Decision problems under risk and chance constrained programming: dilemmas in the transition. Manage Sci 27(6):698–716
Hogan AJ, Morris JG, Thompson HE (1984) Reply to professors charnes and cooper concerning their response response to “Decision problems under risk and chance constrained programming”. Manage Sci 30(2):258–259
Jagannathan R (1985) Use of sample information in stochastic recourse and chance-constrained programming models. Manage Sci 31(1):96–108
Jagannathan R (1987) Response to ‘On the “bayesability” of chance-constrained programming problems’ by Lavalle Manage Sci 33:1229–1231
Johansson DJA, Persson UM, Azar C (2008) Uncertainty and learning: implications for the trade-off between short-lived and long-lived greenhouse gases. Clim Change 88(3–4):293–308. ISSN 0165-0009
Keppo K, O’ BC, Riahi K (2007) Probabilistic temperature change projections and energy system implications of greenhouse gas emission scenarios. Technol Forecast Soc Choice 74(7):936–961. ISSN 0040-1625
Lange A, Treich N (2008) Uncertainty, learning and ambiguity in economic models on climate policy: some classical results and new directions. Clim Change 89(1):7–21
LaValle IH (1986) On information augmented chance-constrained programs. Oper Res Lett 4(5):225–230
LaValle IH (1987) Response to “Use of sample information in stochastic recourse and chance-constrained programming models”: on the ‘bayesability’ of CCP’s. Manage Sci 33(10):1224–1228
Machina MJ (1989). Dynamic consistency and non-expected utility models of choice under uncertainty. J Econ Lit 27(4):1622–1668
Mastrandrea MD, Schneider SH (2004) Probabilistic integrated assessment of “dangerous” climate change. Science 304:571–575
Meinshausen M, Hare B, Wigley TML, Van Vuuren D, Den Elzen MGJ, Swart R (2006) Multi-gas emissions pathways to meet climate targets. Clim Change 75(1–2):151–194
Meinshausen M, Meinshausen N, Hare W, Raper SCB, Frieler K, Knutti R, Frame DJ, Allen MR (2009) Greenhouse-gas emission targets for limiting global warming to 2°C. Nature 458(7242):1158–1162
Morgan DR, Eheart JW, Valocchi AJ (1993) Aquifer remediation design under uncertainty using a new chance contrained programming technique. Water Resour Res 29(3):551–569
O’Neill B, Ermoliev Y, Ermolieva T (2006) Endogenous risks and learning in climate change decision analysis. Springer, Berlin, Germany, pp 283–300
Rive N, Torvanger A, Berntsen T, Kallbekken S (2007) To what extent can a long-term temperature target guide near-term climate change commitments? Clim Change 82(3):373–391
Schaeffer M, Kram T, Meinshausen M, van Vuuren DP, Hare WL (2008) Near-linear cost increase to reduce climate-change risk. Proc Natl Acad Sci USA 105(52):20621–20626
Schneider SH, Mastrandrea MD (2005) Probabilistic assessment of “dangerous” climate change and emissions pathways. Proc Natl Acad Sci USA 102(44):15728–15735
UNFCCC (1992) Article 2. http://unfccc.int/essential_background/convention/background/items/1353.php. Accessed 12 November 2010
UNFCCC (2009) Copenhagen accord. http://unfccc.int/documentation/documents/advanced_search/items/3594.php?rec=j&priref=600005735#beg. Accessed 12 November 2010
Watanabe T, Ellis H (1993) Stochastic programming models for air quality management. Comput Oper Res 20(6):651–663
Webster M, Jakobovits L, Norton J (2008) Learning about climate change and implications for near-term policy. Clim Change 89(1):67–85
Author information
Authors and Affiliations
Corresponding author
Electronic Supplementary Material
Below is the link to the electronic supplementary material.
Rights and permissions
About this article
Cite this article
Schmidt, M.G.W., Lorenz, A., Held, H. et al. Climate targets under uncertainty: challenges and remedies. Climatic Change 104, 783–791 (2011). https://doi.org/10.1007/s10584-010-9985-4
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10584-010-9985-4