News - January 8, 2009


Policymakers incorrectly assume that the costs of climate policy rise exponentially as its targets get more ambitious. This is the view expressed by climate scientist Michiel Schaeffer in PNAS Online.

Most climate scientists work on the assumption that global warming is caused by greenhouse gases such as CO2 and methane. So they advise reducing emissions of these gases, and they have calculated what such reductions cost. And according to their calculation, these costs increase exponentially the bigger the reduction that is demanded.

Schaeffer has made some quite different calculations, however. Together with researchers from RIVM and from the Climate Institute in Potsdam, he related these costs to global temperatures. ‘The temperature is much more relevant to climate change.’ The researchers took the policy objective of the EU – to prevent global temperatures from rising by more than two degrees Celcius – and calculated the investment costs of achieving this objective. They took a risk-based approach: how big is the chance of achieving the objective? ‘And if you put the climate target and the costs into a graph, you see that the costs increase proportionally, not exponentially', says Shaeffer.

This is because it is not just the costs of climate regulation that increase, but also the benefits. ‘Take the CO2 concentration in the air’, says Schaeffer. ‘CO2 absorbs radiation, but at high concentrations there is a saturation effect. So when you set a target of making a small reduction in the CO2 concentration, the initial effect is minimal. Only when the concentration goes down further does the impact increase. This effect cancels out the exponentially rising costs.’

Schaeffer thinks the reason that climate researchers didn’t come up with these calculations earlier is that the research field is divided into specialisms. ‘The economists who calculate the costs focus on the concentrations of greenhouse gases and not on the climate system as a whole, because that is far more complex. It is physicists like me who busy themselves with the climate system. A link has been made between greenhouse gases and temperature, but not yet between temperature and costs.’

The researchers used a simple calculation model ‘with simple equations that anyone can reproduce on a computer’, says Schaeffer. ‘The equations support the basic conclusion, but the figures are not yet usable in policy.’ The researchers now want to apply their calculations in a more complex climate model to come to more precise conclusions. It is highly relevant, says Schaeffer. ‘Up to now, governments often decide not to set any ambitious targets, because they think it will be far too expensive.’

Schaeffer is a member of the Environmental System Analysis chair group at Wageningen University, but he and two colleagues also have a scientific bureau in Rwanda which advises African governments on climate policy. The Indian government has expressed interest in the research results too.