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Cost-benefit analysis is only applicable if the variances of both costs and benefits are finite. In the case of climate change, the variances of the net present marginal costs and benefits of greenhouse gas emission reduction need to be finite. Finiteness is hard, if not impossible to prove. The opposite is easier to establish as one only needs to show that there is one, not impossible representation of the climate change with infinite variance. The paper shows that all relevant current variables of the FUND model have finite variances. However, there is a small chance that climate change reverses economic growth in some regions. In that case, the discount rate becomes negative and the net present marginal benefits of greenhouse gas emission reduction becomes very large. So large, that its variance is unbounded. One could interpret this as an indication that cost-benefit analysis is invalid. Alternatively, one could argue that the infinity is present in both the base case and the policy scenario, and therefore irrelevant; in that interpretation, cost-benefit analysis is a valid tool. [ABSTRACT FROM AUTHOR]

The realm of literature specifically dealing with the climate change problem has rapidly widened during the past decade. In this paper, we review scenarios aiming at emissions mitigation including stabilization of GHG emissions or concentrations in the atmosphere incorporated in integrated assessment modeling studies. To characterize the scenarios, first, the literature was scanned for model and mitigation scenario descriptions in order to lay out their common features. Second, stabilization scenarios from the IPCC SRES database were used for a quantitative analysis of their key results. We conclude with key observations of scenario characteristics and relationships between baseline scenarios and policies followed in the mitigation scenarios. [ABSTRACT FROM AUTHOR]

In order to respond to climate change, it is essential to describe possible future greenhouse gas (GHG) emission trajectories in both nonintervention and intervention terms. This paper analyzes long-term GHG mitigation emission scenarios according to alternative development paths in the world and major regions, based on the nonintervention emission scenarios quantified by the Asian-Pacific Integrated Model (AIM). AIM is revised and applied to the quantification of narrative storylines for scenarios of socioeconomic development, and GHG emissions from energy use, land-use change, and industrial production processes are simulated. A wide range of mitigation policies are adopted in this simulation as responses to the climate change. Several target stabilized levels–650, 550 and 450 ppmv–are analyzed. The results show that to achieve stabilization at a different GHG concentration level, a policy package is essential to reach the target concentration level, rather than a single policy. Energy efficiency improvement will be a key contributor to the reduction of GHG emissions as a result of the policy package. The mitigation cost could be at a medium level, without a large loss of economic growth. The developing world could significantly reduce GHG emissions compared with nonmitigation scenarios with sufficient knowledge transfer from developed countries. [ABSTRACT FROM AUTHOR]