2 Framing Issues Coordinating Lead Authors: Kirsten Halsnæs (Denmark), Priyadarshi Shukla (India) Lead Authors: Dilip Ahuja (India), Grace Akumu (Kenya), Roger Beale (Australia), Jae Edmonds (USA), Christian Gollier (Belgium), Arnulf Grübler (Austria), Minh Ha Duong (France), Anil Markandya (UK), Mack McFarland (USA), Elena Nikitina (Russia), Taishi Sugiyama (Japan), Arturo Villavicencio (Equador), Ji Zou (PR China) Contributing Authors: Terry Barker (UK), Leon Clarke (USA), Amit Garg (India) Review Editors: Ismail Elgizouli (Sudan), Elizabeth Malone (USA) This chapter should be cited as: Halsnæs, K., P. Shukla, D. Ahuja, G. Akumu, R. Beale, J. Edmonds, C. Gollier, A. Grübler, M. Ha Duong, A. Markandya, M. McFarland, E. Nikitina, T. Sugiyama, A. Villavicencio, J. Zou, 2007: Framing issues. In Climate Change 2007: Mitigation. Contribution of Working Group III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change [B. Metz, O. R. Davidson, P. R. Bosch, R. Dave, L. A. Meyer (eds)], Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA Framing Issues Chapter 2 Table of Contents Executive Summary .................................................. 119 2.5 Mitigation, vulnerability and adaptation relationships ...................................................... 141 2.1 Climate change and Sustainable 2.5.1 Integrating mitigation and adaptation in a ..................................................... 121 Development development context – adaptive and mitigative 2.1.1 Introduction......................................................121 capacities ........................................................141 2.1.2 Background .....................................................121 2.5.2 Mitigation, adaptation and climate change impacts ............................................................142 2.1.3 The dual relationship between climate change and Sustainable Development .........................121 2.6 Distributional and equity aspects ................ 142 2.1.4 The Sustainable Development concept .............122 2.6.1 Development opportunities and equity ..............143 2.1.5 Development paradigms ..................................123 2.6.2 Uncertainty as a frame for distributional and 2.1.6 International frameworks for evaluating equity aspects ..................................................144 Sustainable Development and climate change 2.6.3 Alternative approaches to social justice ............144 links ................................................................124 2.6.4 Equity consequences of different policy 2.1.7 Implementation of Sustainable Development and instruments .....................................................145 climate change policies ....................................125 2.6.5 Economic efficiency and eventual trade-offs 2.2 Decision-making .............................................. 127 with equity ......................................................147 2.2.1 The ‘public good’ character of climate change ..127 2.7 Technology ......................................................... 147 2.2.2 Long time horizons ...........................................127 2.7.1 Technology and climate change ........................148 2.2.3 Irreversibility and the implications for 2.7.2 Technological change .......................................152 decision-making ...............................................127 2.7.3 The international dimension in technology 2.2.4 Risk of catastrophic or abrupt change ..............128 development and deployment: technology 2.2.5 Sequential decision-making ..............................128 transfer ............................................................158 2.2.6 Dealing with risks and uncertainty in ....................................... 160 decision-making ..............................................129 2.8 Regional dimensions 2.2.7 Decision support tools .....................................130 References ................................................................... 161 2.3 Risk and uncertainty ...................................... 131 2.3.1 How are risk and uncertainty communicated in this report? ......................................................131 2.3.2 Typologies of risk and uncertainty .....................132 2.3.3 Costs, benefits and uncertainties ......................134 2.4 Cost and benefit concepts, including private and social cost perspectives and relationships to other decision-making frameworks ....... 134 2.4.1 Definitions ........................................................134 2.4.2 Major cost determinants ...................................136 2.4.3 Mitigation potentials and related costs .............139 118 Chapter 2 Framing Issues EXECUTIVE SUMMARY literature. It is concluded that there is a number of factors that condition societies’ or individual stakeholders’ capacity to This chapter frames climate change mitigation policies in implement climate change mitigation and adaptation policies the context of general development issues and recognizes including social, economic, and environmental costs, access to that there is a two-way relationship between climate change resources, credit, and the decision-making capacity in itself. and sustainable development. These relationships create a wide potential for linking climate change and sustainable Climate change has considerable implications for intra- development policies, and an emerging literature has identified generational and inter-generational equity, and the application methodological approaches and specific policies that can of different equity approaches has major implications for policy be used to explore synergies and tradeoffs between climate recommendations, as well as for the implied distribution of costs change and economic, social, and environmental sustainability and benefits of climate policies. Different approaches to social dimensions. justice can be applied when evaluating equity consequences of climate change policies. They span traditional economic Decision-making about climate change policies is a very approaches where equity appears in terms of the aggregated complex and demanding task since there is no single decision- welfare consequences of adaptation and mitigation policies, maker and different stakeholders assign different values and rights-based approaches that argue that social actions are to to climate change impacts and to the costs and benefits of be judged in relation to the defined rights of individuals. policy actions. However, many new initiatives emerge from governmental cooperation efforts, the business sector and The cost and pace of any response to climate change concerns NGOs (non-governmental organizations), so various coalitions will critically depend on the social context, as well as the cost, presently play an increasing role. A large number of analytical performance, and availability of technologies. Technological approaches can be used to support decision-making, and change is particularly important over the long-term time progress has been made both in integrated assessment models, scales that are characteristic of climate change. Decade (or policy dialogues and other decision support tools. longer) time scales are typical for the gaps involved between technological innovation and widespread diffusion, and of the Like most policy-making, climate policy involves trading off capital turnover rates characteristic for long-term energy capital risks and uncertainties. Risks and uncertainties have not only stock and infrastructures. The development and deployment of natural but also human and social dimensions. They arise from technology is a dynamic process that arises through the actions of missing, incomplete and imperfect evidence, from voluntary or human beings, and different social and economic systems have involuntary limits to information management, from difficulties different proclivities to induce technological change, involving in incorporating some variables into formal analysis, as well as a different set of actors and institutions in each step. The state from the inherently unpredictable elements of complex systems. of technology and technology change, as well as human capital An increasing international literature considers how the limits and other resources, can differ significantly from country to of the evidence basis and other sources of uncertainties can be country and sector to sector, depending on the starting point of estimated. infrastructure, technical capacity, the readiness of markets to provide commercial opportunities and policy frameworks. Costs and benefits of climate change mitigation policies can be assessed (subject to the uncertainties noted above) at project, firm, technology, sectoral, community, regional, national or The climate change mitigation framing issues in general are multinational levels. Inputs can include financial, economic, characterized by high agreement/much evidence relating to the ecological and social factors. In formal cost-benefit analyses, range of theoretical and methodological issues that are relevant the discount rate is one major determinant of the present value in assessing mitigation options. Sustainable development of costs and benefits, since climate change, and mitigation/ and climate change, mitigation and adaptation relationships, adaptation measures all involve impacts spread over very long and equity consequences of mitigation policies are areas time periods. Much of the literature uses constant discount