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EMF WP 14.2: Hedging Stratgies for Global Dioxide Abatement: A Summary of Pull Results - EMF 14 Subgroup Analysis for Decisions Under Uncertainty

Working Paper

The global warming problem resembles the dilemma faced by a driver on a foggy road. It is desirable to move rapidly towards one’s destination, but one’s speed must be governed by the distance that one can see ahead, and by the ability to make rapid changes in direction. Reasonable people will differ in their estimates of these factors. A driver does not automatically determine his speed on the basis of worst-case scenarios such as brake failure.

A prudent decision maker allows for the possible costs of rapid mid-course corrections and hedges his bets against both upside and downside risks. Any of the current projections can be wrong. The extremely pessimistic outcomes are headline-grabbing, but they are not a sure thing. Their probabilities need to be considered in the design of global emissions strategies.

This report compares the application of these ideas with seven of the models participating in Energy Modeling Forum Study 14, Integrated Assessment of Climate Change. The acronyms of these models and the most recent documentation for each are shown in Table 1. They differ in terms of the degree to which they include details concerning regions, energy supply and conservation technologies, the carbon cycle, and climate impacts. They all, however, share a common approach: the belief that policy-relevant results can be obtained by comparing the abatement strategies associated with a favorable versus an unfavorable (low probability, high consequence) scenario.

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