Scenario design is a challenge because of the desire to span a wide range of possible outcomes while keeping the number of scenarios to a manageable level. A full uncertainty analysis would sample from uncertain economic/technology and climate parameter inputs. Policy could be addressed as an additional uncertain variable where estimates of the likelihood of policy occurring at different times and stringencies would be necessarily a subjective judgment. The alternative, as in Webster et al. (2012), is to choose multiple “certain” policy scenarios, and produce a large ensemble of runs for each where the different ensemble members represent uncertainty in non-policy related economic/technology and climate parameters. A typical single large ensemble that is able to span the likely range of outcomes may include 400 members. If, then, three separate policy scenarios are examined the total number of scenarios would be 1200.
The broader study design envisioned here was that a variety of analytical teams would use the scenarios for impact assessment. While this study design has the advantage of bringing in more highly resolved models of specific sectors there are some tradeoffs. One is that often the impact analysis approach requires considerable effort to set up each scenario, or the impact models themselves are computationally intensive, thus realistically these teams were likely to be able to consider only a few to a dozen scenarios. Another limitation is that it precludes a full integration and feedbacks. We thus considered 3 policy scenarios and 4 scenarios to capture uncertainty in climate response resulting in 12 core simulations with the IGSM. The scenarios are then used by other modeling groups to provide a consistent evaluation of climate change impacts (see Waldhoff et al. 2013, for an overview).
Policy design
Given the potential interest in understanding the benefits of mitigation, we necessarily considered a “no policy” scenario (Reference, or REF) that would then be the basis for comparison of any mitigation scenarios. A set of Representative Concentration Pathway (RCP) scenarios have been developed in support of the Intergovernmental Panel on Climate Change as described in van Vuuren et al. (2011). The RCPs were defined in terms of total radiative forcing from preindustrial emissions of anthropogenic greenhouse substances including both long-lived greenhouse gases (GHGs), aerosols and tropospheric ozone but excluding effects of land cover change, jet contrails, and other smaller contributors. A total of 4 RCPs were defined where radiative forcing would not exceed 2.6, 4.5, 6 and 8.5 W/m2 by 2100 (i.e., RCP 2.6 does exceed the stated level of forcing at some point, it reaches 2.6 W/m2 in 2100).
Much of the international negotiations are focused on staying below 2 °C of warming from preindustrial. To have a reasonable chance of staying at that level would require the most stringent RCP2.6. That said there is considerable question as to whether such a target is feasible given the lack of significant progress in developing an international agreement to limit greenhouse gases.
Most analyses that attempt to represent such a scenario either relax the requirement to allow for overshoot with gradual return to the lower level, or require some type of negative emission technology. Given the unlikelihood of reaching this goal, we focused on a scenario of stabilization at 4.5 W/m2 and then constructed a 3.7 W/m2 scenario, referred to subsequently as POL4.5 and POL3.7, respectively. While not among the RCP family, it might be considered a somewhat more realistic scenario than RCP2.6, and allows a comparison of what is gained from making the extra effort to get from POL4.5 to POL3.7. While there are many issues that arise in estimating an optimal mitigation trajectory (see e.g., Jacoby 2004) such optimality is where the marginal benefit equals the marginal cost. The differences between POL4.5 and POL3.7 provide something closer to a marginal benefit.
In contrast to RCPs, where each scenario is developed by a different modeling group (and as such some aspects of the scenarios are not compatible, such as, for example, land-use emissions), an advantage of our approach is that all scenarios are constructed with a set of consistent interactions between population growth, economic development, energy and land system changes and the resulting emissions of GHGs, aerosols, and air pollutants. In addition, while the scenarios underlying the different RCPs were developed by different models and assumed different baselines, this study not only uses the same model, but also a single baseline.
Another potentially important element of the scenario design is how the policy is implemented. One might hope to represent a realistic policy design, however, actual policies being implemented by countries today are not close to achieving POL3.7 or even POL4.5. For example, Paltsev et al. (2012) estimate that the Copenhagen-Cancun international agreement would lead to about 9.0 W/m2 by 2100. Hence current policies provide no guidance for what would be needed to achieve these tighter targets. To have any chance of achieving them the policy measures need to be universal, including essentially all countries, and cover all greenhouse gases. And the policies need to be effective. For example, Clarke et al. (2009) consider several models in an idealized cost-effective mitigation setting and conclude that a delay in participation by developing countries increases the costs and challenges of meeting long-term climate goals.
Other important elements of policy design are which countries bear the cost burden of reducing emissions as well as the timing of emissions reduction. While there are many schemes to distribute the burden, such as per capita emissions targets and the like, these often have relatively perverse equity effects (see e.g., Jacoby et al. 2009). As a result, we chose a simple policy design—a uniform global carbon tax, constant in net present value terms, where each region collects and recycles the revenue internally to its representative agent. Through an iterative procedure we determine the tax rate needed to achieve the target, and we apply the tax to all GHG emissions where Global Warming Potential (GWP) indices adjust the tax level for different greenhouse gases.
Reilly et al. (2012) discuss the thought experiment that allows more stringent climate targets by ideally pricing land carbon, and show the significant trade-offs with this integrated land-use approach when prices for agricultural products rise substantially because of mitigation costs borne by the sector and higher land prices. There are also policy coordination issues of extending a carbon tax to land (Reilly et al. 2012) and competition between energy crops and forest carbon strategies (Wise et al. 2009). Therefore, we exclude CO2 emissions from land-use change from the tax in this study.
This formulation of the tax policy means that each region bears the direct cost of its abatement activities but may benefit or lose from effects transmitted through trade. A uniform global tax that is constant in net present value terms, by equating marginal cost of reduction across space and time would, under some ideal conditions lead to a least-cost solution. However, interaction with other distortions and externalities could mean there are even more efficient solutions, e.g., if tax revenue were used to reduce other distortionary tax rates or there were other benefits of reduced conventional pollutants. Similarly, if one designed the tax strategy in consideration of existing energy taxes and policies the economic cost of the policy could be lower. A uniform global tax policy is far more efficient than existing policies because they are highly differentiated among sectors and regions, and often use multiple policy instruments that lead to wide disparities in marginal cost and suffer from leakage.
Climate parameter choice
To represent uncertainty in earth system response to changing concentrations of greenhouse gases and aerosols, the climate sensitivity of the atmospheric model was altered to span the range given by the Intergovernmental Panel on Climate Change (IPCC), with an additional low probability/high risk value. The ocean heat uptake rate in all simulations lies between the mode and the median of the probability distribution obtained with the IGSM using optimal fingerprint diagnostics similar to Forest et al. (2008). This corresponds to an effective vertical eddy diffusivity of 0.5 cm2/s. The four values of climate sensitivity (CS) considered are 2.0, 3.0, 4.5 and 6.0 °C, which represent respectively the lower bound (CS2.0), best estimate (CS3.0) and upper bound (CS4.5) of climate sensitivity based on the Fourth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC 2007b), and a low probability/high risk climate sensitivity (CS6.0). The associated net aerosol forcing was chosen to ensure a good agreement with the observed climate change over the 20th century. This is achieved based on the marginal posterior probability density function with uniform prior for the climate sensitivity-net aerosol forcing (CS-Fae) parameter space shown in Fig. 1. The net aerosol forcing is chosen to provide the same transient climate response as the median set of parameters of the CS-Fae parameter space. The values are −0.25 W/m2, −0.70 W/m2, −0.85 W/m2 and −0.95 W/m2 for, respectively, CS2.0, CS3.0, CS4.5 and CS6.0. While choosing a single value of ocean heat uptake rate instead of sampling all three climate parameters is limiting the representation of the full range of uncertainty in future climate change, it allows for a reasonable number of simulations to be considered. In addition, if we considered a higher (lower) ocean heat uptake rate, it would require higher (lower) values of climate sensitivity in order to reproduce the observed 20th century, thus resulting in similar future climate change. Due to the correlation between climate parameters imposed by the requirement to match the observed 20th century temperature change, this decrease in the range of uncertainty will be rather small, especially on time scales less than one century considered here.