Examination of Witnesses (Questions 62-79)
Dr Chris Hope
18 JANUARY 2005
Q62Chairman: Dr Hope, we are very grateful to
you for coming. I know you have been sitting through the previous
evidence and you know that I start by saying would you please
speak up and speak slowly so that we can make sure we get a complete
record of it. You know something of the questions that we are
going to ask you. Let us see how we get on with those. I will
start the ball rolling by asking the first question. We understand
you have your own integrated assessment model called PAGE. I have
to say that I thought your written evidence was very interesting
insofar as I could understand it. I wonder if you could briefly
explain what an integrated assessment model is and what it tries
to do?
Dr Hope: Certainly, my Lord Chairman. Thank
you very much for giving me the opportunity to talk to you and
hear your questions this afternoon. The last part of Sir John's
evidence led in very well to what an integrated assessment model
does. It is trying to take the best scientific and economic information
that there is out there in the world and combine it together to
find out what the policy implications of it might be. Of course,
there are huge uncertainties with all the scientific and economic
information and therefore to have a credible integrated assessment
model you have to have some way of dealing with that uncertainty
and providing a consistent framework in which you can reflect
different people's opinions about economic uncertainties like
discount rates or equity weighting and scientific information
like climate sensitivities, what will happen if we double the
concentrations of greenhouse gases. That is what an integrated
assessment model gives you. It gives you a consistent framework
to look at different opinions about the scientific and economic
information and what the possible implications of that might be.
Q63Lord Sheldon: There must be a very wide range
of estimates that are produced as a result of examining these
models, both because of the uncertainty of dealing with the future
and of course the long term forecasts. You have got two problems:
the uncertainty and the time. The range of models must be very
great indeed. Can you give us an indication as to why these models
are presented?
Dr Hope: Yes. The best source of information
typically is the IPCC that Sir John has been talking about. It
has very good information on the science, and it has very good
information on the economics as well. The scale of the problem
on the science side is that if we have a doubling of the concentration
of carbon dioxide in the atmosphere then we would expect perhaps
eventually to have a one and a half to five degree centigrade
rise in global average temperature. That is one estimate of the
uncertainty there. On the economic side, if we were to have, say,
a two and a half degree centigrade rise in temperature, which
is around the middle of the range of scientific information, then
the kinds of impacts that you might expect to see may be from
one or two tenths of a per cent of GDP in developed regions if
we are able to adapt well to it, up to possibly several per cent
of GDP in developing regions where adaptation is less possible,
so again you have some idea of the scale of uncertainty. What
integrated assessment models do is allow you to put in ranges
for all of these parameters. The PAGE model has the possibility
of putting in ranges for about 50 of these different parameters,
combine them together and run them in a probabilistic way using
Monte Carlo analysis in order to try and get some output probability
distributions, output ranges for the kinds of things you might
be interested in: the total impacts in perhaps dollar terms of
global warming, the marginal impacts of the last tonne of carbon
that you might be emitting, and therefore that gives you some
sense of the benefits that you would have if you were to start
reducing the emissions of carbon dioxide. The kind of range that
seems to come out is that it looks as though the last tonne of
carbon we emit maybe causes a mean estimate that the damage would
be $60 or so, but the range around that is quite wide, from maybe
$10 up to above $100, round about at least an order of magnitude
of uncertainty of what the marginal impacts would be and therefore
what the benefits would be of reducing carbon emissions.
Q64Lord Sheldon: How do they take account of
the possible offset because of advantages in certain areas where
global warming could be an advantage for agriculture and so on?
Dr Hope: They try to take it into account as
well as they can. Most of the integrated assessment models would
not just look at the world as a single place. They would divide
the world up into regions and would have separate estimates for
what the economic implications of climate change would be in each
of those regions. In the PAGE model, for instance, one of those
regions is the former Soviet Union/Eastern Europe and there the
mean estimate is that there would indeed be a benefit from moderate
amounts of global warming. It is outweighed by the negative impacts
that there would be in most of the other developed countries,
fairly small ones, but particularly the negative impacts that
there would tend to be in developing countries, particularly in
Asia and Africa. The figures that I quote in my note include the
offsetting benefits that you would get in the Soviet Union/Eastern
Europe and they do not come anywhere near the negative impacts
that you would get in the rest of the world.
Q65Lord Sheldon: What about Antarctica?
Dr Hope: Antarctica is a difficult one to deal
with. There is not much economic impact in Antarctica because
there is not much economic activity in Antarctica, but of course
it is one of the last wildernesses of the world and you would
expect to have some estimate of the kind of damage that there
would be in terms of people disliking the fact that you are spoiling
this great wilderness. At the moment those kinds of estimates
for damages to Antarctica tend not to be included in the economic
estimates which the integrated assessment model is built on.
Q66Lord Sheppard of Didgemere: How does one,
in an economic model like that, build disaster in if you are flooded
out in East Anglia or Bangladesh? It must be a bit more than a
one per cent effect on GDP, either in terms of refugees or whatever.
Dr Hope: Most of the integrated assessment models
do not include estimates for refugees, which was the last point
that Sir John made, and PAGE is no different from that. PAGE can
only really build on the kind of economic information provided
by the economic and scientific specialists. It does include things
like the effects on sea level rise, which would lead to flooding
in Bangladesh and other parts of the world. It does include the
kinds of extra extreme events that you would expect to see more
frequently occurring, whether they are storms or droughts, and
it does include the five causes for concern that the IPCC identified,
which includes damage to unique eco-systems, damage from these
extreme weather events, the distributional impacts across the
world, the fact that poor countries are likely to suffer more
than richer countries, aggregate economic impacts and also it
makes a first attempt to try and include the fifth reason for
concern which the IPCC put down following large scale discontinuities,
which is nice scientific language for the real disaster scenarios
that people have, maybe the West Antarctic ice sheet melting,
leading to several metres of sea level rise, or the Gulf Stream
turning off so that the climate of northern Europe would be very
strongly affected. It makes a first attempt to try and incorporate
what is the enhanced probability of that kind of event occurring
and what would be the impact of that and therefore whether we
can fold that into the uncertainties that we are dealing with.
Q67Lord Vallance of Tummel: I was interested
in reading your written submission. It could have been written
by an economist but I gather that your first discipline is as
a natural scientist, so you are an ideal man to talk to in these
two languages. Can we take a peer into an integrated assessment
model? Perhaps you could tell us how, once the emissions scenarios
have been produced, they are then linked into atmospheric concentrations
of greenhouse gases and how then those concentrations are linked
into global warming, because with those you have to span the economics
and the science, I guess.
Dr Hope: Different integrated assessment models
do it in different ways. The ones that are built by economists
tend to have a very rudimentary treatment of the science in that
way. The model I am involved with, the PAGE model, takes the emissions,
looks at the stock of carbon dioxide and other greenhouse gases
in the atmosphere and tries to keep track of that by a very simplified
form of carbon cycle and lifetimes for the other gases. From that
you can deduce what the concentrations are likely to be in the
future and you can then use the formulae that are in the IPCC
and elsewhere for looking at how that increases the radiative
forcing, the extra trapping of heat that will lead from those
concentrations, and again they are not straightforward equations.
Some are logarithmic, some are square root functions, some are
linear functions. Once you have got those estimates for the increase
in radiative forcing you then need to have some treatment of the
thermal inertia of the earth and how that leads the temperature
to rise gradually rather than suddenly, and you can put that in
and then look at the effects that you might expect to see in different
regions of the world when you take into account the kind of global
dimming that Sir John was talking about, the effects of sulphates
which will lead to temperature rising more slowly in some regions
than others, particularly if they have got high levels of sulphates
in them. It has simplified forms for all those factors taken from
the scientific models in such a way that the end result for the
temperature rises that you see from the integrated assessment
model are consistent with more detailed models to within a few
tenths of a degree centigrade. Given the uncertainty that Sir
John was talking about, where temperature rise from 2100 might
be from one and a half to as many as six degrees centigrade, that
is probably a reasonable degree of accuracy for the work we need
to do. Of course, when we are using those simplified forms what
it also allows you to do is to have uncertain values for the parameters
and to track through the uncertainty in what is going to happen
to radiative forcing and concentration of temperatures, which
is what we need to feed into the economic impact part of the model
which comes later.
Q68Lord Vallance of Tummel: Can I ask you the
general question I asked Sir John, and that is whether you think
that the IPCC as a forum is capable of melding the scientific
and economic aspects in a sensible way or whether you should try
to do it yourself?
Dr Hope: I think it is very good in terms of
getting together scientists to provide the best scientific information
and getting together the economists to provide the best economic
information. They tend to be rather separate from each other.
The scientists tend to be in Working Group I and the economists
tend to be in Working Groups II and III. There is some conscious
attempt made to have a transfer of people between the working
groups but there is always the difficulty that it is quite rare
to find a scientist who is fluent in the language of economics
or an economist who is fluent in the language of science, so those
kinds of transfers of people do not happen all that much. What
the IPCC tries to do at the end is to build a synthesis report
which brings together all the scientific and economic information
but it does not tend to have its own modelling capability to be
able to bring them together in the kind of way that I am talking
about here in the PAGE model. It tends to have to rely on integrated
assessment models that have been developed by people like myself
or other people around the world, or else it just has to try and
do some order of magnitude comparison by saying, "It looks
as though the science says that the temperature will rise by two
and a half degrees centigrade if we have a doubling of concentrations.
What do the economic models say will happen if the temperature
rises by that kind of amount?", and it gets them together
in some sort of rough and ready form.
Q69Lord Vallance of Tummel: But you would prefer
it to be inter-disciplinary?
Dr Hope: I would prefer it to be done in a consistent
framework where they are put together in this kind of integrated
assessment model which tries to have a view of the science and
of the economics and allows you to see what happens if you make
slightly different assumptions either of the scientific side or
of the economic side, what that will do in terms of the impacts
that you would expect.
Q70Lord Skidelsky: How satisfied are you with
the idea of using a cost-benefit approach to determine the extent
of global warming in general terms?
Dr Hope: It is not the only approach. I do not
think it should ever be the only approach. It is one component
of trying to get a handle on this very difficult problem. There
is a huge amount of uncertainty about both the science and the
economics, yet we still have to make decisions. One way of doing
that is to bring them together in a common cost-benefit framework
that an integrated assessment model gives you and that allows
you at least to see if you are in the right ball park with the
efforts that you might be making. If the integrated assessment
model gives you values for the social cost of carbon, as PAGE
does, which is tens of dollars for every tonne that you save,
and you think that there are measures that you can take either
by using fiscal incentives or other measures which will allow
you to address that problem and cost much less than that, then
that is probably quite a good sign that you should be beginning
to do something fairly serious about the problem. There are other
ways of dealing with the issue which are perhaps equity-based
rather than cost-benefit analysis-based, which tends not to be
economic efficiency-based. As modellers we try and incorporate
those kinds of equities by using equity weights which give more
concern to us if these kinds of impacts occur in poor countries
rather than rich countries, but there are other equity based approaches
which would say, "No, you should pretend that you do not
know where you are in the world and try and make sure that what
you are doing is bringing up the standard of living and the benefits
to the poorest people in the world almost exclusively".
Q71Lord Skidelsky: Your models are dependent
on the science and also on the economics?
Dr Hope: Yes.
Q72Lord Skidelsky: Do you feel sceptical about
any of this? For example, and I will just take the economic side,
some of the assumptions about convergence for poor and rich countries
I do not think are worth very much. Yes or no? How do you deal
with that kind of uncertainty? How do you incorporate it into
your model?
Dr Hope: Sir John talked a little bit about
the family of scenarios that is used by the IPCC and the very
high end ones have this kind of assumption of convergence. I prefer,
in the scenarios that I use, although I do base them on these
emission scenarios from the IPCC, to use purchasing power parity
exchange rates rather than monetary exchange rates because I think
that is a more sensible way of trying to aggregate things across
different countries. If you do that, then a lot of the problems
that have been identified with these emission scenarios are much
smaller. For instance, in 2100 the GDP per capita under purchasing
power parity exchange rates would be about $50,000 per capita
in the US and western Europe and would be still under $10,000
per capita in south Asia. Therefore, although you have got some
convergence there is still a long way to go before you get complete
convergence. If you were to do that then most of the scenarios
are very useful and a good basis for a start of the analysis,
which is to say that if we do not do anything very aggressive
about climate change, if we allow emissions to continue growing
without doing anything to address them, what sorts of scale of
impacts might we get, what sorts of marginal impacts might we
get, what sorts of impacts would we get from the last tonne of
carbon that we are emitting nowadays? Of course, climate change
probably is a serious problem and we are not going to just let
the emissions carry on in that sort of way. We will want to make
some sort of effort to constrain them because under those kinds
of scenarios from the IPCC the kind of concentration of greenhouse
gases that you would expect to see would be maybe 800 parts per
million by 2100 compared to 275 parts per million in pre-industrial
times and about 370 parts per million now. The concentrations
would be well over double, triple, those of pre-industrial times
and they would be continuing to rise. Obviously, if we are at
all concerned about climate change we will not want to allow that
to continue to happen. What we have tended to see are the kinds
of intervention scenarios which are based around trying to keep
concentrations of greenhouse gases below certain levels, and a
common level people look at, just because it is a nice round number,
is 550 parts per million, which happens to be twice pre-industrial
levels. The interesting thing from my point of view in building
these integrated assessment models and looking at the impacts
of gases is that the marginal impact that you get, the social
cost of carbon that you get, if you assume that that carbon is
being emitted on top of a controlled scenario which controls the
concentrations down to about 550 parts per million, is almost
exactly the same benefit as you get if you assume that that tonne
of carbon is being emitted on top of one of these uncontrolled
scenarios, like scenario A2 from the IPCC. It is a rather odd
result and it is not one that you would normally expect. You would
normally expect, if you were to have a tonne of carbon emitted
on top of a high emission scenario, that that would cause more
extra damage than a tonne of carbon emitted on a low emission
scenario because you would be in the kind of regime where the
temperatures were much higher and we would expect that the damage
would be a non-linear function of temperature, that it would be
a greatly increasing function of temperature. You would normally
expect that if you emitted a tonne of carbon on one of these unconstrained
scenarios it would cause more damage than a tonne of carbon on
top of one of the constrained scenarios. It turns out that is
not true because of this interplay between science and economics
because the function which relates temperature change to concentration
is non-linear and that acts in the opposite direction to the function
that relates damage to temperature change and the two things seem
to cancel each other out and it looks as though the exact details
of the emission scenarios on which you superimpose a tonne of
carbon are not very important in terms of being able to try and
work out what the impacts of that tonne of carbon will be, which
is quite fortunate because everything else of course is extremely
complicated.
Q73Lord Skidelsky: That is an important conclusion.
Dr Hope: Yes.
Q74Lord Macdonald of Tradeston: You seem to
have a contrast between the alarming effects on the scientific
side, which might be the flooding of great cities and the reversal
of the Gulf Stream or enforced mass migration and so on, which
predisposes you to dramatic intervention and action, and what
we have been hearing about the economic impacts of climate change
which seem to be measured, you said, in percentages of a GDP point
or more. We have of course suffered in the 20th century variations
much greater than that. It seems to me that there is a contrast
here. Do you think if you were talking in terms of economic impacts
of climate change alone that is likely to justify changes in international
behaviour or personal behaviour?
Dr Hope: It would greatly depend on the view
that you took about how serious economic impacts are in the developing
countries compared to the economic impact in developed countries.
If we were limiting ourselves just to the way that the economy
functions, maybe the effects on agriculture, the effects in terms
of energy that we will be using, then the impacts in developed
countries would almost certainly be less than perhaps one per
cent of GDP by 2100, but the impacts in developing countries could
be much larger, partly because their ability to adapt to the kinds
of changes that we would be expecting to see would be much smaller
and therefore the agricultural productivity would probably be
hit very hard and a lot of their GDP still depends on agriculture,
of course. It really depends on the view that you take. Are you
only going to be concerned about the developed countries, about
our part of the world, or are you going to be concerned about
all the rest of the world? Of course, different people can have
different views on that and the kinds of figures that come out
of integrated assessment models typically assume that we are at
least as worried about what happens in the rest of the world (or
possibly even slightly more worried about it), because we put
positive equity weights on that, than we are about what happens
in our part of the world. That is not necessarily how we behave
in other areas of policy.
Q75Lord Elder: You have already to some extent
covered this but can you say a little bit more about gases other
than carbon dioxide? Everyone talks in terms of carbon dioxide.
It seems to me that on the very limited evidence so far we should
be at least as worried about other things.
Dr Hope: People talk about carbon dioxide because
if you were to identify one single gas that would be the biggest
component, but it is certainly not much more than half the total
problem. You do have a range of other greenhouse gases, primarily
methane, sulphur-hexafluoride and other gases of that sort. The
integrated assessment models take different routes to dealing
with those. Some of them deal exclusively with carbon dioxide.
The PAGE model does not. It includes methane and the other greenhouse
gases as well so you can begin to make some sort of comparison
of the benefits you get if you were to cut back one tonne of methane,
let us say, compared to cutting back one tonne of carbon dioxide.
In theoretical terms that is the sort of comparison you should
be making to tell you the amount that you should be putting towards
dealing with emissions of methane and emissions of sulphur-hexafluoride
as opposed to emissions of carbon dioxide. It is the ratio of
the impacts that we get from the different gases. It looks as
though the impacts from emitting a tonne of methane are maybe
15 times or so the impacts from emitting a tonne of carbon dioxide.
The impacts from emitting a tonne of sulphur-hexafluoride are
tens of thousands times as serious as emitting a tonne of carbon
dioxide but fortunately the total emissions of sulphur-hexafluoride
are very small around the world, whereas the total emissions of
carbon dioxide are billions of tonnes and that is why when we
aggregate them carbon dioxide is the biggest part of the problem.
Q76Lord Elder: If I pick you up correctly your
model does deal with the other gases.
Dr Hope: Yes.
Q77Lord Elder: But most of the other models
do not?
Dr Hope: I would not say most of them do not.
I would say that a majority of them now do but there is a split
in the integrated assessment modelling between those models which
are based on simulation; they take emissions of the different
greenhouse gases and say, "What is likely to occur if we
have these kinds of emissions? What kind of impacts might we see?",
and models which are based on attempts to optimise, which is trying
to say, "What is the best profile of emissions of greenhouse
gases over time?". The ones that try to optimise tend to
be the ones that just look at one gas, at carbon dioxide, because
it is quite hard to do the optimisation of the different gases
together, and they tend to have rules of thumb for comparing methane
and putting it in in terms of carbon dioxide equivalent rather
than dealing with it properly in terms of what its lifetime will
be in the atmosphere.
Q78Lord Sheppard of Didgemere: Lord Sheldon
was talking about a hundred years being a long time and I think
we agree with that. The knowledge that you and maybe some of your
colleagues have built up on modelling and the whole of this subject
has led you to some fascinating subjects, anything from football
downwards. Has it allowed you to look at some of the short term
energy issues against that total background? If I take just one,
which I am not directly involved in but is interesting, the use
of tidal energy, has that led you to some short term action?
Dr Hope: Yes, because ultimately the decisions
we have to make cover the whole range from very short term to
medium term to long term. It is wrong to say that because this
is a long term issue that only occurs over decades and centuries
then we should be waiting for that sort of time before making
decisions. The estimates that I have given in terms of what is
called the social cost of carbon or the social cost of other gases
does aggregate those kinds of impacts over a very long time period
and bring them back to the present day to say, "What are
the aggregated impacts of a tonne of gas emitted today?",
because it is today's emissions that we have to try and deal with—today's,
tomorrow's, next year's—rather than waiting for 50 or 100
years before doing something about the problem. You need to have
a long term perspective in order to get the full picture of what
the impacts are likely to be from a tonne of gas emitted today.
If it is carbon dioxide it is going to stay in the atmosphere,
certainly for many decades and probably for centuries, and therefore,
if you were to have a time horizon of maybe only the next 10 or
20 years when looking at the impacts of today's emissions, you
would miss out the vast majority of those impacts, so you have
really got to have this long time period of 2100—and I am
sorry to say that most integrated assessment models go even longer
than that and the PAGE model goes to 2200—to try and get
a full picture of the impacts that will come from these gases.
When you have brought them back to today and said, "This
is the social cost of one tonne of carbon or methane emitted today",
you can then immediately compare that with the measures that you
might take in order to try and cut back the emissions. You can
do it either in terms of individual projects, saying, "How
much would this project cost, this tidal power project, and how
many tonnes of carbon would it save for us over a certain time
period?", and you can see if the cost of saving that carbon
is less than the social cost that you have just calculated, or
you can take perhaps a more economic approach and say, "We
have got this estimate of the social cost of carbon and other
gases. Can we have some sort of economic incentive which will
allow the market to deal with this by imposing either a tax or
a tradable permit?", which has its own price if you are going
to emit a tonne of carbon or a tonne of methane and you have to
either pay the tax or buy one of these tradable permits, and that
will then give you an automatic incentive to build projects like
tidal power beyond their normal incentive of just generating electricity.
Q79Lord Macdonald of Tradeston: Is it possible
to build a model of mitigation when you consider that in 1900
we would have had very little idea of what might have been feasible
a hundred years on in the year 2000, and that if you go back to
1800, of course, most of what we are doing now would be almost
unthinkable? Since you have got a couple of hundred years of historical
record can you not make a projection based on some probabilities
about what new technologies would produce which would allow us
to mitigate before the worst consequences happen in 50 or 100
years' time?
Dr Hope: Yes, you certainly should be trying
to build models of mitigation and not just mitigation but also
models of adaptation, because whatever we do within the realms
of plausibility to try and mitigate the problem and cut back the
emissions of gases, we are committed to a certain amount of temperature
rise, almost certainly between one and three degrees centigrade
just from the emissions that we have seen up to now.
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