Climate policy and developing country interests.

Author:Arndt, Channing

27 February 2015

There are a series of questions to which we need answers if we are to implement climate change policies that help avoid negative effects. Three key questions are:

* What are the implications of climate change for economic growth and development?

* What benefits are obtained from mitigation policies?

* What are the costs of pursuing mitigation policies?

These questions are particularly pertinent for developing economies due to the higher temperatures generally prevailing in these countries, a higher level of climate sensitivity, and more limited adaptation capacity.

In order to answer the first two of these questions, we need to understand the effects climate change will have on a given country's economy, and the effects various climate change policies will have on the ultimate outcome. UNU-WIDER, as part of its Development Under Climate Change (DUCC) project, developed a framework which seeks to shed light on these questions. The answer to the third question depends on the kinds of mitigation policies pursued. One possibility, regional or even pan-African low-carbon energy strategies rooted in hydropower, is the focus of a new project from UNU-WIDER.

A framework for tracing the impacts of climate change on society

The change in climate manifests itself as a change in expected levels for temperature, precipitation, barometric pressure, humidity, and other weather outcomes. However, with this information alone, it is difficult to assess the potential impacts of climate change on many variables of interest for human societies--such as economic growth, development prospects, and the material wellbeing of the population.

The framework developed in the DUCC project traces the implications of changes in climate outcomes through a series of important impact channels--including production of hydropower, agricultural yield, water supply/demand balance, and costs of maintaining infrastructure and other installed capital. These impacts then serve as inputs into an economy-wide model of the country in question. The economy-wide models employed respect macroeconomic identities, meaning that all futures are economically coherent, and account for multiple simultaneous impacts. For example, higher levels of rainfall may be favorable for hydropower generation and agricultural production but unfavorable for road infrastructure due to washouts or widespread flooding.

Assessing risks

One of the unique aspects of the framework is explicit treatment of the considerable...

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